The EU Should Give theGreen Light to Services

Amendment to the Act on Income TaxBrings a Number of Innovations

Nanospider Weavedfrom the Threads of Cooperation

01–022006

Moravia- Silesia Region

AllIn

One

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„GRAND“

„STANDARD“„MINI“

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C O N T E N T S

Ministry of Industry and Trade

CZECH BUSINESS AND TRADEEconomic Bi-monthly Magazine with a Supplement is Designed for ForeignPartners, Interested in Cooperation withthe Czech Republic

For the Ministry of Industry and Trade of the Czech RepublicIssued by:

PP AGENCY s.r.o.Myslíkova 25, 110 00 Praha 1, Czech Republic

PP Agency Company with the ISO 9001 certified qualitymanagement system for publishing services

EDITORIAL BOARD:Martin Tlapa (Chairman), Ivan Angelis, Zdena Balcerová, Jiří Eibel, Zbyněk Frolík, Jitka Hanzlíčková, Jiří Havlíček, Růžena Hejná, Josef Jílek, Marie Košťálová, Marie Pavlů, Pavla Podskalská, Josef Postránecký, Libor Rouček, Jiřina Semanová, Jarmila Škvrnová, Jana Víšková, Ivan Voleš

MANAGING EDITOR:Jana Vápeníková

EDITORS:Jaroslava Bradová, Naďa Vávrová

REGULAR COLLABORATORS:Eva Tomášková

TRANSLATION:Vlasta Benešová, Alena Kenclová, Petra van Benten-Knotová, Dagmar Šímová, Daniel Thelen, Eva Vergeinerová

READ:Ivana Kadlecová, James Maxwell, Katherine McCloghry, Zuzana Pavlíčková

GRAPHIC DESIGN:Miloslav Bucvan, Helena Dvořáková

DEADLINE: 30. 11. 2005

ADDRESS:Myslíkova 25, 110 00 Praha 1Czech RepublicPhone: +(420) 221 406 623, +(420) 221 406 626Fax: +(420) 224 934 383e-mail: journal@ppagency.czwww.ppagency.czwww.mpo.cz/engPress run: 13.500 copies.The number of printed and sold copies of the journal is verified by auditor, HZ Praha, s.r.o.,member of PANNELL KERR FORSTER Worldwide.It is not allowed to reproduce any part of the contents of this journal without prior consent from the editor.Attitudes expressed by the authors of articles carried by CBT need not necessarily be consistentwith the standpoint of the Publisher.MK ČR E 6379, ISSN 1211-2208„Podávání novinových zásilek povoleno Českou poštou, s. p., odštěpný závod Přeprava, č. j. 3468/95, ze dne 24. 10. 1995“

■ INTRODUCTIONQuestion of the Month for Milan Urban, Minister of Industry and Trade ................4

■ ECONOMIC POLICYThe EU Should Give the Green Light to Services......................................................5Simplifying the Procedure of Issuing Extracts from the Business Register.................7

■ HOW TO DO BUSINESS IN THE CZECH REPUBLICAmendment to the Act on Income Tax Brings a Number of Innovations.................8

■ BUSINESS AND PRODUCTIONTerrorism Does not Curb Exports, but It Does Increase Production Costs...............10

■ REGION NUTS II – Moravia-Silesia Region......................................................................12–33

■ INVESTMENTThe "Černovická terasa" Industrial Zone in Brno Received the Highest Marks......34The Czech Republic Will Give Support to Nanotechnology ...................................37Kaleidoscope..........................................................................................................38

■ RESEARCHNanospider Weaved from the Threads of Cooperation..........................................36

■ ECONOMIC INDICATORS..........................................................................................39

■ PRESENTATION OF FIRMSREMOSKA s.r.o.........................................................................................................2WALMARK, a.s.......................................................................................................29Veletrhy Brno, a.s. ..................................................................................................40

AC Steel a.s., ANO..., s.r.o., Balakom, a.s., BONATRANS a.s., Erich Jaeger, s.r.o., JÄKLKarviná, a.s., LOUČKA - OLZA, spol. s r.o., MD Příbor s.r.o., MSA, a.s., NOVA - AGRO s.r.o., Hotel Santander, Visteon - Autopal, s.r.o.

Simplifying the Procedure of Issuing Extracts from the Business Register

Terrorism Does not Curb Exports, but It DoesIncrease Production Costs

Nanospider Weaved from the Threads of Cooperation

Question of the Month for Milan Urban,Minister of Industry and Trade

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I N T R O D U C T I O N

M O R E A T :

www.mpo.cz

www.czechtrade.cz

www.ceb.cz

www.egap.cz

www.export.cz

■

Czech exports have broken a number ofrecords in the last two years; exportvalues rising to their peak in thehistory of the independent CzechRepublic. Nevertheless, the Ministry ofIndustry and Trade has prepared a newexport-promoting strategy for this year.What are the strategy goals and whatroom for improvement is there forCzech exports? The chief ambition of the new pro-export-promoting strategy is to establish the CzechRepublic globally as an able business partnerand potential investor. This strategy comes asa response to the continuously risingcompetitive strength of businesses within theEuropean Union, and therefore it aspires to aidCzech exporters by implementing an activeand above all aggressive trade policy. AlthoughCzech export numbers have been at theirhistorical best lately and last year wasconcluded, for the first time in a long period oftime, with a high foreign trade surplus, theCzech Republic must not stand idle. There area number of untapped opportunities ofestablishing the Czech Republic as one of themost dynamic exporters of the EU. We earnedthis title back in 2004. The promotion ofexports, whether goods or capital, is significantnot only for foreign trade but for the entireeconomy and its growth. It enables us to createnew jobs, to increase employment, which initself leads to an increase in household incomesand consequently to a positive impact on thegrowth of demand and consumption. We havetherefore prepared several measures thatshould, from this year onwards, intensify theservices provided to Czech exporters by thestate, leading to their expansion on foreignmarkets.

■

Which are the main pillars of thestrategy and what expectations do youhave of this latest export supporteffort? The Ministry of Industry and Trade wants toprovide Czech exporters with high qualityservices. From consulting, support ofparticipation at trade fairs and the provision offinancial services such as loans and insurance,to organizing trade missions and mediating tiesto institutions abroad. The underlying trait ofthe new export-promoting strategy is above allthe aim to combine the services of all theexisting export- promoting institutions (theCzech Trade Promotion Agency/CzechTrade,

the Czech Export Bank, and the ExportGuarantee and Insurance Corporation). Theseinstitutions shall offer businesses new oradvanced forms of support in their search fornew markets and in their effort to conquerthem. Greater attention will, for instance, bepaid to establishing new export alliances, tothe financing of export, and to creatinga customer service centre for exports. Staterepresentatives abroad will also play a greaterrole, especially in seeking out new businesscontacts. Another new feature will includemeasuring the strategy’s effectivity, by meansof which we hope to obtain feedback on theeffectivity of new public services. One of thecriteria is the value of Czech goods exports percapita. Thanks to the export-promotingstrategy for the 2006 – 2010 period, this valueshould increase from the present USD 6 300per capita to USD 10 400 in the year 2010.Another positive effect should be a rise inemployment amounting to up to 50 thousandnew jobs.

■

How will the strategy influence thecooperation of Czech exporters andtheir foreign counterparts? Whichcountries are a priority for this newform of export support?The strategy should certainly raise the qualityof this cooperation and further intensify it.With the support of the state, Czechbusinesses will be in a position to concludelarger contracts, they will, to a greater degree,be able to meet new potential businesspartners. For foreign businesses, this strategywill signify new opportunities to acquirefurther business contacts. We wish to facilitatethe penetration of Czech exporters onto newglobal markets, which they have until nowbeen unable to enter or have simply lacked theconfidence to venture upon. Besides this, weintend to support businesses in thedevelopment of their activities on markets theyalready know and trade on successfully, suchas the countries of the European Union. Theexport-promoting strategy has pre-selecteda few dozen countries that are considered tobe our priority interest, in the direction ofwhich we intend to direct the greatest supportfor Czech exports. These countries include, forinstance, the USA, Canada, certain countries inSouth America, as well as certain Arab andAsian states, and the countries of the formerCMEA countries. The chief prerequisite for thefulfilment of the vision of the export strategy isto increase exports to these new marketsespecially. ■

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The European Parliament has sofar been unable to agree onwhat the new directive on

services is to be like. Some advocatethe liberalisation proposal submittedby the European Commission inMarch 2004, others oppose it. Whichside does the Czech Republic take?As it is in the Czech Republic’s interest thatthe internal market for services should startto function effectively, the Czech Republic isan advocate of the liberalisation proposal ofthe European Commission. However, fromthe Czech viewpoint, the present proposalfor a services directive still containsa number of controversial issues that haveto be resolved before it is adopted. Forexample, we demand that in addition to theservices already excluded, lotteries andgames, as well as tax issues should beeliminated, too. The Czech Republic alsodemands a better definition of the countryof origin principle, and of the proposedexceptions.

■ Is it possible to guess how theEuropean Parliament will eventuallyvote?An indication of how the EuropeanParliament may eventually decide on thedraft directive can be drawn fromdiscussions of the EP Committee on theInternal Market and Consumer Protectionheld in November 2005. The sessionadopted amendments submitted by thesupporters of the liberalised version of thedraft directive, which is certainly good newsfor the Czech Republic. Unfortunately, thesituation regarding the draft servicesdirective is not so straightforward, and it isthus difficult to anticipate the outcome ofthe first reading in the EP, scheduled forJanuary 2006.

■ The services sector is nowexperiencing a big boom in theworld, and it is the main factor ofgrowth in developed economies,where services contribute decisivelytowards both GDP and employment.How does the situation in the Czecheconomy compare?We are experiencing the same trend – theservices sector is constantly developing andits share in the GDP and in employment isgrowing year by year. However, this area stillholds untapped potential for our economy,and we must focus on that. A few figuresfor comparison – according to OECD data,the share of services in overall gross value

added amounted to approximately 65 % inthe Czech Republic in 2003, against 74 %in the EU (15), 80 % in the USA, or 76 % in Japan. What is more, the CzechRepublic’s share is lower in comparison withthe other countries of the Visegrad Fourgroup, namely by 5-7 %.

Concerning employment, OECD datashow that approximately 65 % of the totalnumber of workers in the Czech Republicare employed in services, whilst the share incountries of the EU (excluding the ten newmembers, i.e. the countries that acceded inMay 2004) is approximately 78 %, and thedifference is even higher when compared tothe USA and Japan, amounting to 20 and15 %, respectively.

■ If adopted by the EuropeanParliament, what effect can theservices directive have on the EUeconomy?These questions have so far been addressedon the EU level by three studies, each froma different angle. The most comprehensiveresults were probably those presented ina study of the Danish CopenhagenEconomics Institute. It shows that if theservices directive were adopted andapplied, then businesses, in particular smalland medium-sized enterprises, wouldbenefit from enhanced productivity andhigher employment accompanied by higherwages and lower prices. Expressed infigures, the adoption of the directive is tobring a 0.6 % increase in economicgrowth, and a rise of 0.3 %, i.e. up to 600 000 new jobs, in EU employment. Realwages are expected to increase by 0.4 %,and return on capital could rise by 1.1 %.The CPB Netherlands Bureau for EconomicPolicy Analysis aimed to find out how theEU directive will - if fully implemented -affect cross-border trade and foreign directinvestment in commercial services. Thestudy concluded that bilateral trade incommercial services could rise by 15-30 %or - in terms of the overall EU trade increase(i.e. including trade in goods) - by 1 to 3 %.The EU proposal could result in a 20 to 35 % increase in foreign direct investmentin commercial services.

■ What impact could the new directivehave on the Czech economy?The elimination of barriers would meantougher competition. This should bringcustomers greater efficiency in the provisionof services, increases in production andvalue added, higher employment, and price

The ambitious goal of the EULisbon Strategy - to overtake theUSA in economic competition by2010 - is not realistic at themoment, but the European Unioncould make considerableheadway by removing barrierswhich hinder free trade inservices on the single market.This is why the EU is currentlydebating a draft directive onservices on the internal marketthat should help to eliminatebarriers. We asked Martin Tlapa,Czech Deputy Minister ofIndustry and Trade, what positionthe Czech Republic has taken onthe new directive.

The EU Should Give the Green Light to Services

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E C O N O M I C P O L I C Y

reductions. At the same time trade inservices with other EU states should expand.The supply range will thus expand, bringinga welcome change for customers. It isassumed that the Czech Republic couldexpect a 1-2 % GDP increase (about CZK 24–50 billion, EUR 0.8-1.7 billion) and thecreation of about 25 000 new jobs, which isapproximately the equivalent of 0.5 % ofthe labour force in the Czech Republic.These are considerable benefits. Theadoption of the directive will certainly havea positive effect on the size of Czechexports. It is estimated that revenues willsoar by about CZK 14 billion (approx. EUR0.5 billion). Furthermore, if adopted, thedirective should not mean any majorincrease in the import of services to theCzech Republic. This reasoning is based onthe premise that the country has one of themost open economies in the world, and it istherefore no problem today for mostforeign companies to provide their serviceshere.

■ Which sectors would feel the mostthe impact of the new directive?An analysis of the impact the adoption ofthe directive would have on the economyhas been calculated by the KPMG

consulting firm at the request of theMinistry of Industry and Trade. It says thatthe effect would be particularly favourablein legal and accounting services, as well asin construction, wholesale, health, andsocial services. These services account foralmost two-thirds of the overal lcontribution of services to GDP.

■ If the advocates of the liberalisedmarket win, are Czech firms ready totake advantage of the directive?The road to success on the single market forsmall and medium-sized companies couldlead via a specialisation in particular servicesof a higher quality for which demand ishigher in the more developed EU states, andvia a focus on exploiting the so-calledmarket niches. And how are we to preparefor the new conditions? Each businessentity must know in particular the specificfeatures of the market it is entering, and theinterest there is in the product it islaunching on the market, whether domesticor foreign.

■ It appears that the new directive onservices would bring considerablebenefits for the Czech economy. How

will the Ministry of Industry andTrade aid its adoption?The Czech Republic has several possiblemeans of pushing through as many of itsamendments as possible to see the directiveapproved in a form most conforming to theCzech standpoint. Firstly, it must havea clear and unambiguous posit ion,substantiated by arguments on the differentprovisions of the draft directive, to be ableto better assert this position. Secondly, itcan propose compromises, and is alreadydoing so, concerning controversial points inthe draft, and thus push the debate towardsquicker adoption. It can also influence thedirection that some changes in the draftdirective will take. Thirdly, it should activelyprovide information on the meaning theadoption of the draft directive will have forboth the Czech Republic and the EU. Thisinformation should be objective, based ontruthful and verifiable data, and should byno means have a political basis that couldlead to tendentious assertions. These threeareas offer the Ministry of Industry andTrade, the guarantor of the draft directivefor the Czech Republic, great scope toensure that the demands mentioned heredo not remain a mere fiction on paper but,on the contrary, become reality.

Zdena Balcerová

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I N T R O D U C I N G T H E I S S U EO F C E R T I F I E D E X T R A C T S

The amendment introduces the issue ofcertified extracts. It will newly be possiblefor these to be issued by notaries andholders of postal licenses, i.e. Česká pošta,s.p. In practice this will mean that notariesand branches of Česká pošta(www.cpost.cz) shall print off a data reportprovided with a qualified time stamp andattach to it a certification clause togetherwith their seal. This service is beneficial inthat it increases the number of contactpoints, at which it will be possible toobtain document extracts from individualregisters. The basis for enabling the issueof certified extracts was an amendment tothe Electronic Signatures Act No. 440/2004Coll. It enacted a new concept into theCzech legal system, the so-called qualifiedtime stamp, thanks to which relevantdocuments may be issued by means ofcomputerised authorised personnel, thatis, without direct human control.

■ D ATA S H A R I N G A C TThe proposed amendment is related to the

Data Shar ing Act, current ly underpreparation. According to this Act, thedatabases and registers of individualauthorities shall become interlinked. Inpractice, this means that an official seekingthe details of a certain person will be ableto request this data via the informationsystem and the citizen will thus not berequired to present various certifications toindividual authorities. Needless to say, thedata sharing system places high demandson the security of the entire system.

Whilst the Act on Public AdministrationInformation Systems creates the technicalprerequisites for data sharing, the DataSharing Act determines which dataauthorities are to share and under whatconditions.

■ I N T R O D U C T I O N O F T H EP U B L I C A D M I N I S T R AT I O NP O R TA L , T H E O N LYC O M P R E H E N S I V E P O I N T O F A C C E S S TO P U B L I CA D M I N I S T R AT I O N S E R V I C E S The amendment reinforces the role of thepublic administration portal by introducing

Act No. 365/2000 Coll., on PublicAdministration InformationSystems, which arose from thenecessity to enact legally themanagement of information andcommunication technologies andsystems in public administration,is being amended. For reasonsand requirements stemming frompractice, the amendment seeksto remove existing discrepanciesin current legislation, at thesame time responding to furtherdevelopments of information andcommunication technologies. Thechief principles of the draftedamendment to the Act on PublicAdministration InformationSystems include the concept ofissuing certified extracts frompublic administrationinformation systems (includingextracts from business registers),greater specification of the rightsand obligations of personsrelated to the management ofinformation systems, theintroduction of a publicadministration portal, whichalone offers comprehensiveaccess to public administrationservices, and the obligation toadapt the web sites of publicadministration and self-government institutions in sucha way that will make themaccessible to persons withphysical handicaps.

Simplifying the Procedure of Issuing Extracts from the Business Register

For more information, please

see the web sites of the

Public Administration

Information Systems –

www.isvs.cz and the Ministry

of Informatics – www.micr.cz.

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H O W T O D O B U S I N E S S I N T H E C Z E C H R E P U B L I C

the public administration portal as the onlypoint of access to public administrationservices. Members of the public will thusbe able to communicate with the publicadministration electronically via one singlepoint of access - the portal, without theneed for complicated searches for the website of each authority.

■ A C C E S S TO T H E W E B S I T E S O F P U B L I C A D M I N I S T R AT I O NA N D S E L F - G O V E R N M E N TI N S T I T U T I O N S TO U S E R S W I T H P H Y S I C A L H A N D I C A P S The draft bill also introduces the obligationto adapt web sites of public administrationand self-government bodies in order tomake them accessible to persons withphys ica l handicaps. New auxi l iarytechnology such as audio response and

Brai l le should be made avai lable,mediating information from websites tousers with physical handicaps.

■ B E G I N N I N G D E V E L O P M E N T O F E - G O V E R N M E N TIt is undisputable that the draft bill willmean the beginning of the development ofe-government in the Czech Republic.

The draft bill has so far been passed bythe Chamber of Deputies and is currently(December 2005) being discussed in theSenate. If it is also passed by the Senateand the President, the Act will come intoeffect in the course of the year 2006.Consider ing that certa in technicalmodifications cannot be carried outimmediately, the legal force of the Act willbe divided up into three different periods.On declaration of the Act, only those parts

of the Act will come into force thatconcern certified extracts from publicadministration information systems. As of1 January 2007, the rest of the Act willcome into force with the exception of theprovisions relating to the accessibility ofweb sites to persons with physicalhandicaps. These provisions will not comeinto force until 1 January 2008.

Michal ŠpinarLawyer

PETERKA & PARTNERS v.o.s.(e-mail: spinar@cabinet.cz)

TA X AT I O N O F D I V I D E N D S One of the most significant changesincludes provisions on exemption

from taxation of dividends paid out bya subsidiary company to the parentcompany with its registered seat in one ofthe EU member states. In the case that thegeneral meeting decides to pay outdividends after 1 January 2006, it will bepossible for companies in the CzechRepublic to exercise exemption fromtaxation of income paid out as dividend,given that the share of the parent companyin the subsidiary company amounts to atleast 10 % and that the duration ofownership of this share is at least 12months. As in 2005, this exemption mayalso be exercised in cases where theprerequisite of the duration of shareownership is not met at the time of thedecision by the general meeting, however,this condition will be met in the future. Thischange s ignif icantly broadens thepossibility of exercising the exemption incomparison to the year 2005, when a 20 %

share in the subsidiary company anda duration of at least 24 months wererequired.

■ T R A D E I N D E R I VAT I V E SAnother significant change concernscla iming loss on transact ions withderivatives. Up until the end of the 2005taxation period, the loss on transactionswith derivatives could not be claimed fortax purposes, unless proof could beprovided that the derivatives concernedwere derivatives negotiated for hedgingpurposes. It is, however, possible to claimthis loss in the following three taxationperiods given that the gains on thesederivates are shown for the relevanttaxation period. Beginning with thetaxation period initiated in the year 2006,the amendment allows the potential losson derivatives to be claimed regardless oftheir character. However, currently a newamendment is discussed in the Parliamentthat could allow applying these rulesalready in 2006.

On 1 January 2006, anamendment to the Act onIncome Tax came into force.This amendment brings over 180 changes in the areagoverned by the Act on IncomeTax and further changes in othertax legislation and related laws.

Amendment to the Act on Income Tax Brings a Number of Innovations

For more information,

please see the web site of

the Ministry of Finance –

www.mfcr.cz

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C Z E C H B U S I N E S S A N D T R A D E

■ L O W C A P I TA L I S AT I O NThe amendment also addresses theapplication of rules for low capitalisationcontained within the previousamendments to the Act on Income Tax.Based on passed amendments, the circle ofpersons to whom the rules of lowcapitalisation apply was broadened. At thesame time, it was determined that thisbroadening would not apply to credit andloan contracts concluded before thecoming into force of these amendments(old contracts).

■ T R A N S F E R P R I C I N GThe amendment to the Act on Income Taxmakes it possible to obtain an officialstatement from the Tax Administrator onthe evaluation of transfer pricing amongstaffiliated companies. It will, however, onlybe possible to submit requests for theevaluation of planned transactions, not thetransactions already carried out by thetaxpayer. The fee for a binding evaluationis CZK 50 000 (approx. EUR 1 700). It will

also be possible to submit requests forbinding evaluations for newly emergingcompanies.

A binding statement obtained in thisway should then be accepted by the taxoffice in the case of an audit in the relevantcompany and in other companies thatshare in the transaction under scrutiny.

■ C O S T S O F T R A N S P O R TAT I O NO F E M P L OY E E S TO P L A C E O FW O R K A N D C O N T R I B U T I O N STO W A R D S A C C O M M O D AT I O N As of the tax period commencing in theyear 2006, all costs for transportation ofemployees to the place of work by publictransportation will be tax deductible.Furthermore, expenses up to CZK 3 500per month for the cost of temporaryaccommodation of employees in lodginghouses will also become tax deductible,given that the municipal ity of thetemporary accommodation is not identicalwith the municipality of the employee’splace of residence. These measures should

contribute to a greater mobility of thelabour force.

■ A D D I T I O N A L C H A N G E SThe amendment brings relatively extensivechange to the taxation of physical persons,especially in the area of taxation ofentrepreneurial activit ies, where anincrease has been made to the amountclaimable in flat-rate costs. At the sametime, a certain reduction has been made totax rates for lower income categories andan expansion has been made of the lowestcategory for the taxation of physicalpersons. Furthermore, tax deductionsapplicable to physical persons have beenabrogated to be replaced by tax rebates.This change should ensure the same taxrelief to all tax payer groups, regardless oftheir income and applicable tax rate.

Petr Toman, Manager, Tax ServicesKPMG Česká republika

(e-mail:ptoman@kpmg.cz)

E X P O R T S I N H I B I T T H E C Z KE X C H A N G E R AT EThe economic situation of Czech

exporters is good. More than two-fifths ofthe polled exporters believed that thesituation of their companies was betterthan it had been in the same period of2004. But they said that exports from theCzech Republic have an adverse influenceon the CZK exchange rate and raiseproduction costs. On the contrary, theexchange rate is influenced by theproductivity of labour, an increase incompetitiveness due to quality, and thetraditional reputation of Czech productsabroad. The self-confidence of Czechexporters is constantly on the rise. Thepolled exporters regard the conditions of

exports from the Czech Republic as goodand better than in the previous years.Almost 72 % of exporters are satisfiedwith the conditions, and only 25 % givethem a bad mark. The self-confidence ofexporters is based primarily on thereasonable prices of products. Thetradition of Czech products, the goodname of Czech manufacturers, and thequality of Czech products are Increasinglyappreciated abroad. But these products arestill lacking the highest technical andtechnological standards.

■ OT H E R FA C TO R SI N F L U E N C I N G E X P O R T SThe European Union membership of theCzech Republ ic s impl i f ies exportsaccording to 63 % of the pol ledcompanies. Two-thirds of exporters do notexpect the resul t of the 2006parliamentary elections to influence theconditions of exports from the CzechRepublic, and 24 % of the sample is of theopposite opinion. Of the latter, two-fifthsbelieve that the conditions will depend onthe winner, one quarter believe that theresult will have a positive influence, andonly 6 % fear an adverse influence. Theintroduction of a toll in the CzechRepublic will have both good and badeffects. The adverse ones will slightlyprevail. Exporters mention mainly a 24 %

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The DHL Export Research hascommissioned the GFK companyto conduct its twelfth opinionpoll of the most importantCzech exporters on topicalevents in the Czech Republicand abroad. In October 2005,GFK phoned the top-rankingexport managers of 251 firms.Surprisingly, one-fifth of thesample had to cope with corruptofficials or authorities in thecountry of destination, whereasonly 7 % of exporters had tocope with terrorist-relatedlimitations. Exporters also cameup against protectionism,various licences andcertifications, andadministrative fees, whichcomplicate business. Marketsare thus protected mainly byChina, North America, andRussia.

Terrorism Does not Curb Exports, but It Does IncreaseProduction Costs

R E S U LT O F T H E 2 0 0 5 D H L E X P O R T P R I Z E

The results of the 8th DHL Export Prize competition for smalland medium-sized exporters are in. As in the previous years, the2005 edition was held under the aegis of the CzechTradeAgency. The criterion for the competition was based on an indexcalculated as the multiple of the year-on-year growth in exportsand the share of exports in the turnover. Exports in the periodfrom 2003 to 2004 were compared with the previous analogousperiod. "The DHL Export Prize shows our company’sappreciation of Czech exporters whose position on foreignmarkets is not at all easy," according to Jiří Stojar, DirectorGeneral of DHL Express.

The winner of the DHL Export Pr ize was RCDRadiokomunikace spol. s r.o. from Staré Hradiště (www.rcd.cz),which develops and manufactures radio communicationequipment and its components. The company exports itsproducts mainly to Germany. Predominant among them areradio stations for railways, and systems operating below thesurface (in tunnels). RCD Radiokomunikace spol. s r.o. recordedan almost four-fold year-on-year rise in exports.

In the second place was PROGRESS OK a.s. from Přerov(www.progress-ok.cz). This company manufactures steelstructures of cranes and halls. Its main clients are in Germany

and Austria. PROGRESS OK a.s. almost doubled its exports in theperiod concerned.

In the third place was ELITRONIC s.r.o. (www.elitronic.cz),which develops and manufactures electronic goods and controlsystems exported mainly to the Netherlands, China, andBelgium. Its year-on-year rise in exports was almost four-fold.

In conjunction with the competition, the CzechTrade Agencypresented prizes to its most successful clients – competitors for thehighest exports using the services of the agency in the period from30 October 2004 to 30 September 2005. Their exports increasedfrom CZK 475 million (approx EUR 15.9 million) in 2003 to morethan CZK 1.1 billion (approx EUR 37 million) in 2005. First placewas won by Korona Lochovice, s. r. o. (www.korona-lochovice.cz),which manufactures office folders, and concluded contracts forCZK 78 million (approx EUR 2.6 million) in the period concerned.In the second place was INCO engineering, s. r. o. (www.incoengineering.cz) (complete mining equipment, signallingsystems for mines going mainly to the Ukraine and Russia) withcontracts for CZK 51 million (EUR 1.7 million), and third wasPanbex, s. r. o. (www.panbex.cz) (manufacture of industrial floorsand connected building materials) with orders for CZK 45.8 million(approx EUR 1.5 million).

The firm Panbex s.r.o., which manufactures industrialfloors, has received orders for CZK 45.8 million(approx EUR 1.5 million)

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C Z E C H B U S I N E S S A N D T R A D E

rise in transport costs, and a resulting 15 % increase in the prices of goods. Onthe contrary, transit will be reduced, roadswill be safer by 22 %, and road repair andconstruction funds will be sufficient. Theintroduction of the euro will probablyhave no influence on exports, and if so itwill be positive. More than two-fifths ofthe sample does not expect the euro toinfluence future contracts. Approximatelyone-third of exporters expect positiveimpacts. It is noteworthy that 68 % ofexporters had not expected any influenceon exports shortly before the enlargementof the EU, but they soon changed thatopinion.

■ A W A R E N E S S O F E X P O R T-P R O M OT I N G P R O G R A M M E SExporters know of export-promotingprogrammes, but are not capable ofmaking good use of them. Information issomewhat better in Moravia than inBohemia. Exporters gain informationmainly from the Internet (67 %), the press(34 %), ministries (33 %), the services ofCzechTrade (29 %), and governmentsupport to fairs and exhibitions (19 %).

Czech firms benefited the most fromthe development of contacts andinvestment into technologies; 21 % ofexporters presented their companiesabroad, and 13 % have innovated theirproduction. Those polled take the viewthat stable exchange rates would helpexports from the Czech Republic. Theythink that the Government and the stateshould be more committed to thef inancing of exports and reducingproduction costs.

The EU member countries - especiallyGermany and Slovakia - and Russia are themain markets for Czech exporters.

Josef NěmečekCzechTrade

(e-mail: josef.nemecek@czechtrade.cz)www.czechtrade.cz

The total turnover of the competing

companies was CZK 5 billion (approx

EUR 167 million), and their total

exports were CZK 3.3 billion (approx

EUR 110 million). On average, each

par t i c ipant ’s expor t s were CZK

65 million (approx EUR 2.2 million),

and the turnover was CZK 123.4

million (approx EUR 4.1 million).

Exports accounted for a lmost

53 % of the turnover. The total year-

on-year growth in exports of all

competitors was almost 34.4 %,

which was approximately one-third

more than the rise of exports from the

Czech Republic in the same period

(25.5 %).

The competing companies exported

mainly to Germany (17 %), Austria

(7.1 %), Slovakia (4.8 %), and France

(4.8 %), the EU countries (6.3 %), and

Asia (4.8 %).

| 12

R E G I O N

NUTS II – Moravia-Silesia Region

Moravskoslezský krajKrajský úřad (Regional Office of theMoravia-Silesia Region)28. října 117702 18 OstravaCzech Republicphone: +420 595 622 222fax: +420 595 622 126e-mail: podatelna@kr-moravskoslezsky.czwww.kr-moravskoslezsky.cz

In connection with the CzechRepublic’s accession to the EU,8 statistical NUTS II units werecreated in this country inaccordance with the bindingregulations of the EuropeanParliament and the EC Councilconcerning the commonEuropean classification ofstatistical territorial units(NUTS). The purpose is to facilitate an objectiveevaluation and comparison of different European regions,especially for tasks related to drawing finances from EU Structural Funds.

■ T E R R I TO R I A L D I V I S I O N ,L O C AT I O N , P O P U L AT I O NThe Region is situated in the northeast ofthe Czech Republic. In the north and east,the Region’s border is formed by the stateborder with the Polish Republic (provincesof Silesia and Opole), in the southeast, bythe border with Slovakia (Žilina Region).The territory of the Moravian-SilesianRegion is comprised of 6 districts (NUTS IV)– Bruntál, Frýdek-Místek, Karviná, NovýJičín, Opava, and Ostrava-City. Its area of 5 535 sq. km takes up 6.8 % of the area ofthe Czech Republic, and is the sixth largestamong the country’s regions. In terms ofpublic administration the Region is dividedup into 22 administrat ive units ofmunicipalities with extended competences,which comprise a total of 302municipalities, 40 of them towns.

The Region’s proximity to the borderoffers the poss ib i l i ty of effect ivecooperat ion in manufactur ing,

infrastructure development, protection ofthe environment, culture-re latededucational activities, and especiallytourism. For this purpose, 4 Euroregionshave been established in this territory,namely Beskydy (www.euroregion-beskydy.cz), Praděd (www.europraded.cz),Silesia (www.euroregion-silesia.cz) andTěšín Silesia (euroregion.inforeg.cz).

The population of 1 251 883 makes itthe region with the highest number ofinhabitants in the Czech Republic. Its 302municipalities, however, rank it amongCzech regions with the lowest number ofmunicipalities. Most inhabitants (62 %) livein towns with over 20 000 people, which isexceptional among the regions. Almosta quarter of the Region’s population live in the regional capita l of Ostrava(www.ostrava.cz). Other large towns withover 50 000 inhabitants include Havířov(www.havirov.cz), Karviná (www.karvina.cz), Opava (www.opava-city.cz), andFrýdek-Místek (www.frydek-mistek.cz/).

■ E C O N O M I CC H A R A C T E R I S T I C SFrom the 19th century onwards the Regionwas, and also is at present, one of themajor industrial areas of central Europe. Itscore is the Ostrava-Karviná industrial andmining district, where industrialisation wasclosely linked to the use of the localnatural resources, especially black cokingcoal of high quality, and the relateddevelopment of heavy industry and ironand steel production. The Region is thecountry’s heart of the iron and steelindustry, with 100 % of the CzechRepublic’s iron production, 92 % of steelproduction, and 98 % of coke production.Black coal mining is concentrated in theRegion as well (covering almost the entireoutput of the CR), although miningvolumes are on the decrease.

The engineering industry is representedby the car making and metal workingindustry sectors. The Region’s chemicalindustry mostly turns out large-volumechemicals as pr imary products orintermediate products designed for furtherprocessing, as well as rubber and plastics.In addition to these traditional sectors,other branches that are increasinglygaining ground in the Region include thefood industry (mainly beer brewing andmeat processing), the woodworkingindustry, the manufacture of electronic andoptical instruments, and electricity and gasproduction and distribution.

The structure of the sectors in theRegion, however, brings considerable

Bruntál

OpavaKarviná

Ostrava

Fr˘dek-MístekNov˘Jiãín

Almost one-quarter of the inhabitants of the Region live in the regional capital of Ostrava(www.ostrava.cz)

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C Z E C H B U S I N E S S A N D T R A D E

(E 462) Nový Jičín – Frýdek-Místek – ČeskýTěšín, which cut across the eastern part ofthe Region. Two international railways(E 40 and E 65), which are a part of thespeed corridors, pass through the Region.An important section of the country’s mainPrague - Bohumín ra i l l ine is themodernised No. 270 Route. Access by air isprovided by the Ostrava-Mošnovinternat ional a i rport (www.airport-ostrava.cz), the second largest airport inthe Czech Republic. The length of itsrunway, 3 600 metres, enables all types ofaircraft to land without limitation.

■ E D U C AT I O N , C U LT U R E ,TO U R I S MThe quality of the system of education inthe Moravia-Silesia Region is high. Thebroad range of its primary, vocational, andsecondary schools and job trainingestablishments is complemented by 12colleges and four universities (Vysoká školabáňská – the Technical University of Ostrava- www.vsb.cz, the University of Ostrava -www.osu.cz, the Silesian University inOpava - www.slu.cz, and the BusinessSchool Ostrava - www.vsp.cz). Their 13faculties altogether provide education for 33 000 students. Traditional cultural

centres of the Region include Ostrava,Opava, and for the District of Těšín Silesia,with its sizable Polish minority, Český Těšín(www.tesin.cz). Ostrava is the seat of theJanáček Philharmonic, which is well-knowninternationally. Besides cultural and sportsfacilities in the towns and villages, northernMoravia and Silesia also offer numerousopportunities for recreation, tourism, visitsto cultural monuments, and health-relatedstays. In summer, the Region’s vast networkof foot paths is ideal for hiking and cycling,in winter the mountain ranges of HrubýJeseník and Beskydy are sought-afterresorts for cross-country and downhillskiing. The pride of the Moravia-SilesiaRegion are its many cultural monuments.The Region boasts municipal heritage sitesand chateaux. The most prominent castlesare Sovinec in the Rýmařov area(www.sovinec.cz), Starý Jičín (www.stary-jicin.cz), and Hukvaldy in the Beskydyarea (www.janackovy-hukvaldy.cz). Spaservices in the Region are based on themedicinal effects of the iodine-bromidewaters in Darkov Spa (www.darkov.cz).Since the early 1990s, there is also a newspa sanatorium with interest ingarchitecture in Klimkovice (www.sanatoria-klimkovice.cz). ■

B R I E F C H A R AC T E R I S T I C S O F T H E R E G I O NNUTS Area (sq. km) Population Municipalities Population density

(persons/sq. km)NUTS IV – Bruntál 1 657 99 138 71 60NUTS IV – Frýdek-Místek 1 273 226 995 77 178NUTS IV – Karviná 347 275 496 16 794NUTS IV – Nový Jičín 918 159 225 57 174NUTS IV – Opava 1 126 180 278 80 160NUTS IV – Ostrava-City 214 310 751 1 1452NUTS II – Moravian-Silesian

Region 5 535 1 251 883 299 226NUTS I – Czech Republic 78 868 10 235 365 6 248 129Source: Czech Statistical Office (as of 30 June 2005)

100

200

300

400

500

600

700

02001

469505 502 541 533

583547

620

2002 2003 2004 2001 2002 2003 2004

2

4

6

8

12

1416

18

10

0

15,11

8,9

15,89

9,81

16,84

10,31

15,12

9,47

Average gross monthly wages 2001 – 2004 (EUR)

Moravia-Silesia Region CR

Unemployment rate 2001 – 2004 (%)

Moravia-Silesia Region CR

problems connected with restructuring.Cuts in coal mining and in the heavyindustry are affect ing the rate ofunemployment. This is especially true ofthe districts of Ostrava-City, Karviná, andFrýdek-Místek, while the districts ofBruntál, Opava, and Nový Jičín havea higher share of agr iculture anda considerably lower share of largecompanies undergoing restructuring.

Although, as a result of this, thecontribution of the Moravia-Silesia Regionto the gross domestic product is falling, it still remains the second highest amongstthe regions of the Czech Republic (10.3 %).

Revenues from the sale of products andservices are the second highest of all thecountry’s regions, after the CentralBohemia Region. These two regionsaccount for one-third of all revenues fromindustrial activities in the entire CzechRepublic.

Agricultural land takes up a half of theRegion’s area, other more than 35 % iscovered by forest land (mainly in theJeseníky and the Beskydy Mountains). Inaddition to its natural resources, theRegion has rich deposits of raw materials -primarily hard coal, natural gas, limestone,granite, marble, slate, gypsum, gravelsands, sands, and brick clay.

■ T R A N S P O R TThe construction of the D47 highway(www.viamoravica.cz), which is to becomea part of the Pan-European MultimodalCorridor VI, was launched in 2002. Thehighway, between Lipník nad Bečvou andthe Polish border near Bohumín (80.2 km),is to facilitate transport and help economicrecovery in the area.

At present the road communicationsystem is formed by the main internationalroads I/11 (E 75) Opava – Ostrava – ČeskýTěšín – Mosty u Jablunkova and I/48

%

EUR

EUR exchange rate as of 31 December 2004 (EUR 1 = CZK 30.465)

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R E G I O N

The Moravia-Silesia Region – a Place to Live and Do Business

The focus on mining and on iron and steelproduction no longer is of the importance itonce was. There is a great interest in ourRegion - many new investors are turningup. We are happy about it, but at the sametime this poses new problems that we haveto deal with.

The Region is home to more than ten,very successful industrial zones. Althoughoccupied on an average by 60 per cent,there are also some that are expandingtheir operations in response to thecustomer demand and interest.

In 2004 and 2005, the Moravia-SilesiaRegion succeeded in securing a great dealof funding from the European Uniontreasury by taking part in the projectcompetitions. It was the beginning ofa period of truly massive infrastructureinvestment: we are modernizing the airportand our road network, we supportentrepreneurship by building roads to orderso as not to inconvenience people in theneighbourhood of industrial zones withheavy transport, we support projects forthe revital isat ion of old industr ia l

complexes for new projects, we assist indraft ing terr i tor ia l plans and havesucceeded in lobbying for quality roadconstruction and modernization of therailways. I am convinced that today ourRegion is the best place to do business andto live. Why? It is the Czech Region withthe highest population - 1.25 millionpeople live here. The Region is situated onthe border of the Czech Republic, Polandand Slovakia, and thus has a very goodstrategic position, a catchment area andgreat consumer purchasing power. Ourpeople are traditionally technically welleducated, and they are very flexible - newemployers have virtually no problemfinding qualified staff. In this context,I must mention the importance of our fouruniversities within the Region, where theytrain experts often in very specializedprofessions. Indeed, support for educationranks among the top priorities for theMoravia-Silesia Region.

Evžen TošenovskýPresident of the Moravia-Silesia Region

VA C A N T A R E A S F O R I V E S TO R SName District Total Area Available Price Electricity Potable Service Telecom- Vicinity of* Vicinity *Vicinity *Railway Contact

(hectares) Area (CZK) water water munications highway of airport of railway sidingBolatice Opava 16 8 N/A yes yes no yes 20 40 4 No starosta@bolatice.czČeský Těšín – Pod Zelenou Karviná 12 5 100 yes yes no yes 0.1 50 1 No valosek@rkka.czKarviná – Nové Pole Karviná 45 0 100 yes yes no yes 10 40 1 No valosek@rkka.czKopřivnice – Industrial Park Nový Jičín 80 1.7 200 yes yes yes yes 8 12 1 No lsimeckova@nettle.cz,Krnov – Červený Dvůr Bruntál 48 0 100 yes yes no yes 70 70 4 No mskalka@mukrnov.czOstrava – Hrabová Ostrava 60 0 300 yes yes no yes 1 20 3 No mkolder@mmo.czOstrava – Mošnov Nový Jičín 30 0 N/A yes yes no yes 6 1 3 Yes mkolder@mmo.cz Ostrava – ScientificTechnological Park Ostrava 10 7,5 600 yes yes no yes 3 25 7 No Jaromir.dudek@vtpo.cz Třinec – Baliny Frýdek-Místek 20 0 80 yes yes yes yes 25 50 1 yes vera.palkovska@trinecko.cz

Exchange rates as of 1 December 2005: 1 EUR = CZK 28.95, 1 USD = 24.67* in km

The Moravia-Silesia Region was,and still is, one of the mostimportant industrial regions inCentral Europe. In the last fewyears we have recorded a majorchange in the structure of thesectors – suppliers to the car-making industry, to informationand communication technologies,the woodworking industry andother new branches areincreasingly finding their place in the market.

Exports of the Moravia-Silesia Region in the first half of 2005 amounted to CZK 100 376million, and accounted for 10.9 % of the total exports of the Czech Republic (CZK 919 377 million). The Region retained its second position in total Czech exports (after theCentral Bohemia Region). The most important export commodities of the Moravia-SilesiaRegion were iron and steel (SITC 67) – 30.4 %1), coke, coal, and briquettes (SITC 32) – 9.7 %, electrical machinery, apparatus, and appliances (SITC 77) – 8.6 %, manufacturesof metals (SITC 69) – 7.5 %, and general industrial machinery and equipment (SITC 74) –4.6 %. These commodities had a share of more than three-fifths (60.8 %) of the exportsof the Moravia-Silesia Region.

1) The share in the total exports of the Moravia-Silesia Region in the 1st half of 2005.Note: the January-June 2005 data are specified according to the 29 November 2005 closing date.

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C Z E C H B U S I N E S S A N D T R A D E

The Agency Is a Significant Player in the Field of EconomicDevelopment within the Moravia-Silesia RegionThe role of the regionaldevelopment agencies iscontinuously growing in theEuropean Union. Their mission is to improve regionalcompetitiveness, to increaseemployment, to provide morehigh-quality labour places, tobring balance to the differencebetween the towns and thecountryside, and to providea more effective use of theendogenous potential forsustainable growth. These arealso the basic goals of theRegional Development AgencyOstrava (ARR). The main goals of the ARR as a servicingorganization for the Moravia-Silesia Region are to give supportfor investment opportunities, tohelp with the development ofbusiness properties, to givesupport to businesses, especiallyto small and medium sizedenterprises and helping to createthe necessary conditions for the use of EU funds.

Agentura pro regionální rozvoj, a.s.Ostrava(Regional Development Agency Ostrava)Na Jízdárně 7, 702 00 OstravaCzech Republicphone: +420 595 691 211fax: +420 595 691 204e-mail: bruskova@rdaova.czwww.rdaova.czwww.dynamicregion.cz

The ARR has recently been concentratingon services. Professional services toinvestors and businessmen thus add morevalue to the other advantages of theMoravia-Silesia Region. These includeinvestment opportunities, investmentincentives and employment policies for theRegion. The ARR will guide interestedparties who will be doing business andinvesting in the Region free of chargethrough all the stages of this process, fromfirst presentations at the outset toaftercare services. Services provided duringthe investors decision-making process areespecially important. ARR can supply thenecessary data and entries related to theRegion for feasibility studies, make basicterrain research in specific industrialbranches, look for subcontractors andpartners and invite other public sectorinstitutions that could be useful.

■ H E L P D U R I N G T H EI N V E S T M E N T P R E PA R AT I O NS TA G EThe ARR is developing an intense networkin the area of business property with thegoal of creating a whole spectre of realestate and development of property withinthe Region. Apart from the supply ofsuitable greenfield localities for theconstruction of plants or the use ofexisting industrial facilities or possiblybrownfields, ARR clients can also get helpdur ing planning and construct ion,company set-ups, finding employees andseveral other outsourced services, forexample accounting, tax, and legal services

and other consultations. Supply of anoptimal portfolio of local product andserv ice suppl iers re lated to off iceequipment and day-to-day business isanother standard part of ARR’s services.

One should say that ARR shares theseservices with several local institutions andnewly created business infrastructures,inc luding c luster in i t iat ives. Theorganisation of companies in key regionalbranches into c lusters has beensuccessfully implemented in engineering,the wood-processing industry includingthe production of furniture, in the ICT andcar subcontracting sectors.

You can be introduced to ARR eitherduring your research visit to the Moravia-Silesia Region, or during any of the severalsignificant events or initiatives beingorganised by ARR. No matter where youare, you will be welcomed to the Regionthrough the regional internet portalwww.dynamicregion.cz. Updatedinformation about the developments ininvestment and business in the CzechRepublic and in the Moravia-Silesia Regioncan also be found at the Investment &Business Forum international conference.You can also learn about business realestate via the IFO Property Fare (October19–20, 2006). The goal of the regionalproINVEST init iat ive is to mobi l i seguaranteed suppliers of services andproducts. Other initiatives include thedevelopment of clusters – ClusterNet andthe coordination of regional innovationactivities – InOVA. ■

In 2005, Ostrava hosted the 6th conference on the transport infrastructure and logistics, TRANSPORT 2005

| 16

R E G I O N

The Union for the Development of the Moravia-SilesiaRegion is Bringing Economic Prosperity to the RegionThe Union for the Developmentof the Moravia-Silesia Regionwas established in the nineties. Itwas created on the basis ofa consensus between the publicand private sectors in order tobenefit the development of theRegion. Currently, it has 94members, the majority of whomare important regionalenterprises. Other membersinclude universities and technicalschools, development agenciesand advisory organisations,municipalities, and cities, medicalinstitutions, banks, and insurancecompanies.

■ W H AT I S S U E S A R E O F T H EG R E AT E S T I N T E R E S T TO T H EU N I O N ?The Union sees its mission as representingthe interests of its members through theEuropean Union. This calls for participationin several work groups and expert sections,participation in the preparation of regionaldevelopment concepts, the determination ofregional priorit ies and for severalrevitalization projects. Cooperation withother Czech regions and with our foreignpartners is also developing.

■ T H E M O S T I M P O RTA N TA R E A S O F I N T E R E S T:

• Infrastructural development projects andprogrammes and regional developmentconcepts

This includes the support and coordinationof the main projects related to theconstruction of the VI Multimodal Trans-European Corridor. Its goal is to createa direct connection between the Region andthe main European transport networks andbring about a solution concerning ourregional transport. The construction of theD 47 highway, the R 48 speedway, theSecond and Third Railway Corridors, findinga solution for the I/11 – I/57 spinal roadincluding improvements to transportconnections with Slovakia and thedevelopment of the Ostrava-Mošnov Airportcan serve as specific examples of theseefforts.

• Development plans in areas such asenergy, waste and the environment

The Union was the main initiator ofa solution for the regional energydevelopment plan, for the supply of oilproducts in the Region, and for theconceptual solution of what to do withwastes in relation to energy and theenvironment, including the use of biomassand of renewable resources. This method isannually presented at the internationalconference known as "WASTES 21".

• Development of science and research,education, and human resources

The Union is associated in the sixthframework EU programme for thedevelopment of science and research and inother projects related to the expansion ofspecialised education.

• Improvement of investment and businessmilieu in the Region

This area is mostly about the creation ofbroader conditions for the entry of investors,as well as about the overall improvement ofthe business milieu. Since the year 2000, theUnion has supported the search forperspective industrial circuits – clusters, ofwhich some, for example engineering orwood processing, have already beenestablished. The Union also participates – incooperation with the Regional EconomicChamber – in the project known as"Revitalisation of the Economy of theMoravia-Silesia Region".

Miroslav FabianManaging Director

The Union for the Development of theMoravia-Silesia Region

www.msunion.cz

17 |

C Z E C H B U S I N E S S A N D T R A D E

CLOSEDSECTION

TUBESJÄKL Karviná, a.s.

member of MITTAL STEEL Group

www.jakl.cz

OPENSECTION

Rudé armády 471733 23 Karviná - Hranicetel: +420 596 391 111fax: +420 596 311 373e-mail: jakl@jakl.cz

Producer of steel thin-walled welded tubes and sections and open sections

| 18

R E G I O N

Technical University Actively Involved in Science,Research, and Technology Exchanges

■ S C I E N C E A N D R E S E A R C HP R I O R I T I E SScience and research are crucial if therestructuring of the Moravia-Silesia Regionis to succeed. This is why TUO has joinedother top Czech technical universitieswhose science, research and developmentpotentials constitute an important part ofpromoting the innovative activities in theMoravia-Silesia Region and the CzechRepublic as a whole. The results testify tothe strength of the University’s professionalcapital. For example, it is developinga Technology Transfer Centre (TTC), whichis instrumental in the establishment ofcontacts on a national and internationallevel in the commercial use of science andresearch. Its activities include consulting onthe protection of intellectual property andpatent laws. An important step in thisrespect is the operation of the OstravaScience & Technology Park (VTPO inCzech), which has been set up with otheruniversities in the TUO complex at Ostrava-Poruba (more about VTPO in a separatetext on page 20). Three TUO faculties (theFaculty of Metallurgy and MaterialsEngineering, the Faculty of MechanicalEngineering, and the Faculty of ElectricalEngineering and Computer Science)cooperate in the Materials TechnologyResearch Centre, which was set up withinthe Research Centres programme workingtogether with the Vítkovice - Research andDevelopment jo int stock company.Another research development for

industrial use in the Region is the newlyconceived Centre of Advanced InnovationTechnologies, which will focus on researchinto high-tech development andapplications, such as nanotechnologiesand nanomaterials. The Regional ContactOrganizat ion (RCO), part of theTechnologies Transfer Centre, has been setup to support Czech entities which seekfinancial support for projects within the EU6th Framework Programme. The RCO willalso work for the University’s incorporationinto the structures of the EuropeanResearch Area.

■ I N T E R N AT I O N A LC O O P E R AT I O NTUO cooperates extens ively andtraditionally with a number of Europeantechnical univers i t ies and researchfacilities. In the last few years, its contactshave extended to Canada, the USA, Japan,China, and Taiwan. Cooperation includesjoint work on projects implemented withinternational research grants, and also inthe exchange of doctoral students andyoung tutors on secondments for theorganisation of joint scientific conferencesand publications. The school’s teamsgained their first experience of thisinternational cooperation in science andresearch through the project tenderswithin the EU 4th Framework Programme,or through other programmes whichsupport scientific work (CEEPUS, AKTION,COPERNICUS, BARRANDE, EUREKA,government grants). The decisive sourcesfor the funding of international scienceand research projects are now representedby the EU 5th and 6th FrameworkProgrammes.

The University also participates ininternational educational cooperationprogrammes. In recent years it was mostlythe TEMPUS programme, but its extent hasbeen gradual ly reduced and mostcooperation activities have focused onprogrammes in which the Czech Republicis a partner (SOCRATES, LEONARDO),rather than a mere funding recipient(TEMPUS). Further possibilities are open forcooperation on the basis of contracts thatthe university or its facult ies haveconcluded with more than 70 institutionsof higher learning in twenty countriesthroughout Europe, the USA, Japan,Australia, Taiwan, and Vietnam. The mostimportant of these include contacts withTohoku University of Japan, long-termcooperat ion with Southern I l l inoisUniversity Carbondale (SIUC), as well asthe newly-developing shared activities with

At the threshold of the 21stcentury, the Vysoká školabáňská – Technical University of Ostrava (TUO) has beenexperiencing dynamiceducational developments inscience and research, as well as in its cooperation with theindustry and business sectors.The current number of studentsranks it as fourth among theuniversities in the CzechRepublic. TUO has beenassisting throughout thedifficult period oftransformation connected withthe conversion of industry fromits traditional form linked tocoal and iron. This ambitionaffects the use of the school’s researchfacilities, the creative focus of the students and teachers,and the tuition whichsubsequently is involved inspecific issues and projects.

TUO cooperates extensively and traditionally with a number of European technical universities and researchfacilities

19 |

C Z E C H B U S I N E S S A N D T R A D E

the National Chiao Tung University inTaipei and National Taipei University ofTechnology.

■ C O O P E R AT I O N W I T HI N D U S T RY A N D T H EE C O N O M I C S E C TO RThe Univers ity’s f i rst and foremostobjective is to ensure quality, well-developed tuition in order to prepare thestudents for their future employment andincrease their labour market value. For thisreason, the University cooperates withindustry representatives in the creation andimplementation of study programmes thatincorporate the new development trendsof the dynamically changing economy. Inorder to obtain and share the necessaryinformation, TUO has established theConsulting Centre which, after only a fewyears of operation, has established verygood contacts with major employersthroughout the Czech Republic. TheUniversity’s main partners include, forexample, the companies Tř ineckéželezárny, Nová Huť, Vítkovice, BorsodChem , Hewlett Packard, Radegast,

Metrostav, OKD, Siemens, Škoda Auto,Hayes Lemmerz, SEPAP Štětí, ElektrárnaOpatovice, SME, ZTO, Moravskoslezskéteplárny, DEZA, VÚHŽ, Vysoké pece

Ostrava, ŽĎAS, Tatra, Škoda, Tesla Sezam,Philips, and many others. Contact:http://portal.vsb.cz/

The University also participates in international educational cooperation programmes

| 20

R E G I O N

Scientific Technological Park – Connecting Research and Practice

Scientific Technological Park Ostrava in itsfocus on the synergetic connectionsbetween innovation companies, academia,and industrial companies. The companywas established at the end of 2004. Sinceits establishment, its activities have beenconcentrated on putting the latestdevelopments in science and research intopractice, especially focusing on savingenergy. Recent examples include projectssuch as the use of recyclable heat inmetallurgical plants with the aim of savingfossil fuels, and hydrogen technology thatcreates a significant opportunity forcompanies in this specif ic region(concentrated sources of coal,concentration of industrial gases witha high content of hydrogen, and greatpotential for technically educated people)to become involved in this progressiveeconomic stream. The ForSTEEL Companyalso actively participates in the creation ofthe Hydrogen Cluster. The main goal of thisproject is to support hydrogen technologiesthat use the subsidies from the Ministry ofIndustry and Trade known as ProgrammeCluster. The purpose is to assess allpotential resources for the production ofhydrogen and its subsequent use.

The establishment of the Division ofVirtual Instrumentation for the ELCOM, a.s. company (www.elcom.cz) in 1997followed the projects that had been solvedby the Department of E lectr ica lMeasurement at the Faculty of ElectricalEngineering and Computer Science at theVŠB – Technical University of Ostrava (FEI).One of the most successful projects withinits own research is the analysis of energyinterference and the power qualityanalyser BK-ELCOM, that was awarded thegold medal at the Internat ionalEngineering Fair in Brno in 2003. It wasselected by the public tender that wasorganized by the ČEZ and E.ON ČRcompanies as a winning solution forequipping key energy systems in the CzechRepublic. Currently, this division employsmore than 35 workers, of whom most aregraduates of FEI. During their existence,teams from this division solved manyresearch and development projects formany customers from all around the world.The Division of Virtual Instrumentationsupplies automated measuring and testingsystems for prestigious producers fromareas including telecommunications,automotive industry, the pharmaceuticalindustry, the electronic industry andelectrotechnics industry, producers of airconditioning systems and the energyindustry etc. ■

Entry to STPO can bring several advantagesfor companies. Investors can get financialsupport in cooperation with the CzechInvestAgency (www.CzechInvest.org) in the formof grants, tax exemptions, and subventionsthat can be used, for example, for theresearch and development of software,telecommunication services, and in the areaof information technologies. The park alsooffers opportunities in areas such asbiotechnologies, nanotechnologies, thedevelopment and production oflaboratories, measuring and controlengineering, the development of software,and production and installation of ITtechnologies. A newly constructedmultipurpose building located in the centreof the industrial park offers suitable office,laboratory, social, and presentation spaces.As a "business incubator", it is also an idealplace for setting up companies. The buildingis already completely occupied, whichconfirms its high demand. By 2007, VTPOintends to increase its capacity by a further14 200 square meters by constructing threeother sites that will later be rented as theScience Technological Part – LocalityOstrava-Pustkovec. Development of a newzone in the Nad Porubkou area will bring anopportunity for a broader spectrum ofbusiness activities such as administrativeservices, education services, small-scaleproduction with high value added, repairservices, call centres and data centres, etc.

■ A D VA N TA G E O U SC O O P E R AT I O NThe ForSTEEL, s. r. o. company (www.forsteel.cz) shares a vision with the

Vědecko-technologický parkOstrava, a.s. (ScienceTechnological Park Ostrava, jointstock company – STPO) wasestablished in 1997 on thecampus of the VŠB – TechnicalUniversity Ostrava with the aimof connecting business withscientific research and puttingthe results into practice. Thefollowing subjects were involvedin establishing the company: TheStatutory City of Ostrava,Agentura pro regionální rozvoj,a.s. (Regional DevelopmentAgency Ostrava, joint stockcompany), and three localuniversities: the TechnicalUniversity Ostrava, the Universityof Ostrava, and the SilesianUniversity.

Vědecko-technologický park Ostrava,a. s. (Scientific Technological ParkOstrava, joint stock company)Technologická 372/2708 00 Ostrava-PustkovecCzech Republicphone: +420 597 325 999fax: +420 597 325 998e-mail: info@vtpo.czwww.vtpo.cz

A newly constructed multipurpose building located in the centre of the industrial park offers suitable office, laboratory,social, and presentation spaces. As a "business incubator", it is also an ideal place for setting up companies

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Development of Cluster Initiatives in the Moravia-SilesiaRegionClusters are an important partof regional innovationstrategies and the Moravia-Silesia Region is the first regionin the Czech Republic to have embarked on this newroad. An analysis of the largestindustries in the Moravia-SilesiaRegion revealed thatengineering is the mainindustrial sector in the area,with the greatest potential andstrategic importance for theRegion’s development. Up to600 firms operating in differentbranches of engineering havebeen identified here, andapproximately 200 of themhave been included in a registerthat is continuously updatedand expanded.

The Union for the Development of the Morav ia-S i les ia Reg ion (www.msunion.cz) founded the Moravia-SilesiaEngineering Cluster (2003), and as theinitiator and leader of these activities, itplans to further promote strong clustersin the Region, for instance in IT, chemicalsand p last ics , and env i ronmenta ltechnology.

A cluster of the wood-processingindustry was established in 2005, anda three-year project for the developmentof the Moravia-Silesia Wood Cluster willfollow. A mapping project for an ICTCluster, focused on the development ofsoftware, will be concluded in 2006,when the establishment of a clusterorganisation and the launch of a projectfor “ ICT Cluster Deve lopment” i senvisaged. A project for hydrogen clustermapping, focused on the technology ofhydrogen production, storage, transport,and use is also to be completed in 2006,when a cluster is to be built and the“Hydrogen Cluster Development” projectis to be launched. A mapping project fora cluster of automotive componentsuppliers is to be started in February

2006, focusing on the manufacture ofparts and components for the automotiveindustry.

The above mentioned projects are co-funded by the state budget and ECstructural funds, mediated by the Ministryof Industry and Trade. Co-funding is alsoprovided by the Moravia-Silesia Region,which considers the cluster sectors thebasis of the regional economy.

An important partner for the projects isthe Vysoká škola báňská - TechnicalUniversity of Ostrava, the faculties ofwhich participate in the different clusterin i t ia t i ves . The Univers i ty i s a l sodeveloping cluster initiatives in the area ofrenewable energy. A coordinating role inthe support of cluster initiatives is alsoplayed by the Union for the Developmentof the Moravia-Silesia Region and theRegional Development Agency in Ostrava.

■

www.msunion.cz

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AUTEL’s Vision: "Let’s Give Life to Technologies"

■ M A J O R S U C C E S S A B R OA D Evidence of the company’s success isespecially in its exports. Up to 1995, thecompany exported less than 10 % of itsoutput, whilst in 2004 export alreadyrepresented 50 % of the company’s overallperformance. Successful projects abroad inthe metallurgical industry area includeheating furnaces (engineering and supply ofheavy current and automation applications)to Spain, Turkey, and Brazil, a rolling millreconstruction in Poland (engineering andsupply of drives and automationinstallations), the delivery of a galvanizingline, a pickling line and HCl regeneration line(automation engineering) to China,

ramming and drilling machine (engineering,heavy current, and automation installations)for a Russian blast furnace. In the powerindustry it has made its way to the market in Latvia, Sweden (engineering andautomation applications), Hungary – thesupply of four boilers (engineering anddelivery of heavy current and automationinstallations), Turkey, Mexico, Taiwan, theUSA, and power plant desulphurization inPoland (engineering and automation). Thefocus on the quality of services and suppliesled the company to begin in 1995, incooperation with the ITI TÜV BayernGruppe, to implement a qualitymanagement system compliant with the

AUTEL is a purely Czechcompany that providesengineering services (design,programming, start-up) andstate-of-the art equipment inturn-key solutions to heavycurrent installations andautomation of technologicalunits in metallurgy and thepower industry. These servicesand supplies are designed forpartners in the Czech Republicand West Europe, with end-users of supplied equipmentsituated world-wide. At the timeof its establishment in 1993,AUTEL had 30 employees. Theirnumber has gradually increasedto 96; additions mainly includespecialists in design andprogramming. In order to ensurethe high quality of constructionwork, AUTEL set up itssubsidiary AUTEL-montáže, s.r.o.at Třinec in 1994, which focuseson measuring and controlsystems montage and on panelbuilding.

Successful projects abroad in the metallurgical industry area include heating furnaces (engineering and supplyof heavy current and automation applications)

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international standard ISO 9001. Successfulcertification according to the ISO 9001:1994standard was accomplished in 1996, and in2002, AUTEL was re-certified according tothe new ISO 9001:2000 standard.A surveillance audit takes place in the

company each year, and a renewal audit isimplemented every third year.

The vision, values, and employees of thecompany are firm foundations for itsdevelopment in the next decade of itsactivity. The dynamics of market

development and the country’s accession tothe European Union pose many challengesfor AUTEL in the coming period.

More at www.autel.cz(e-mail: info@autel.cz)

The last 15 years have been very important in thecompany’s development - Bonatrans succeeded onnew markets in West Europe and in the world. Itsturnover has risen more than sevenfold since 1991.Bonatrans a.s. exports to 65 countries and accountsfor 30% of the relevant European market.

B O N AT R A N S – A N I M P O RTA N TE M P L OY E R I N T H E R E G I O NWith its 2005 turnover of EUR 127 million,Bonatrans ranks among the most importantengineering companies in the Moravia-SilesiaRegion. Also important is its co-operation withpartners in the neighbouring Polish part of Silesia.As a prosperous company, Bonatrans gives stableemployment and good prospects to its employees,and sponsors many social, cultural, and sports

In its nearly 40-year existence,Bonatrans a.s. has worked itsway up from a regional supplierof railway wheels and wheelsetsto the largest Europeanmanufacturer of wheelsets for the most ambitious railwayprojects. Wheelsets fromBonatrans carry Euroshuttlelocomotives under the EnglishChannel, German ICE expresstrains, the fastest Europeanlocomotives manufactured by Siemens, and serve inhundreds of other types ofrailway and urban rail vehicles.

The Most Important Engineering Company in the Moravia-Silesia Region

activities in the Bohumín area. As a holder of theISO 14001 certificate, the company strives forsustainable development of the environment.

Bonatrans provides jobs for almost onethousand of its own employees and for dozens ofpeople employed by its sub-suppliers. It is animportant and stable employer in the region witha high unemployment rate. The company putsemphasis on the employment of university andsecondary school graduates and traininginstitution leavers, as they bring "young blood"into business.

V I S I O N F O R T H E F U T U R EBonatrans a.s. wants to remain a stable employerand taxpayer in the Moravia-Silesia Region, and tocontinue co-operating with universities in jointresearch and the preparation of graduates. It willalso continue supporting the town of Bohumín,where it is based. The company regards thecompletion of infrastructure – especiallya motorway connection – as crucial to thepromotion of business in the Region.More at www.bonatrans.cz

–PR–

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Ostrava – City

Magistrát města Ostravy (Ostrava Municipal Office)Prokešovo nám. 8729 30 OstravaCzech Republicphone: +420 596 444 444fax: +420 596 118 861e-mail: info@mmo.czwww.mmo.cz

Ostrava is the capital as well as the seat ofthe Moravia-Silesia Region. The city datesback to the 13th century when it wasestablished because of the so-called amberpathway leading from the Baltic acrossCentral Europe to the Mediterranean Sea.With its population of 310 751 inhabitants,Ostrava is the Region’s biggest city. Onefourth of the regional population lives in thecity. The city is also an important transportjunction with a dense network of city publictransport, five railway stations and aninternational airport in Mošnov. Greatdevelopment has occurred in the city since18th century, after the discovery of highquality black coal there. The biggestdevelopment in industry and growth ofpopulation was recorded at the beginning ofthe 20th century, when other industrialbranches became linked with the mining ofblack coal. Heavy industry within the CzechRepublic was established in the Region atthat time. More than one half of Czechworkers in this branch were employed here,while the share in the metallurgy branchreached 70 %. The structure of industry andthe face of Ostrava then changed after1989. Coal mining and heavy industry werescaled down in favour of the developmentof light industry. The economic structure isstill, however, characterised by a dominant

urbanism, immense local historical andcultural heritage as well as the sporting andrecreational possibilities throughout thenearby mountains suggest that Ostrava isalso a city that is developing as a centre fortourism.

share in iron metallurgy, the chemicalindustry, heavy engineering, production ofelectric energy, and the building industry.A high concentration remains in the heavyindustry branches such as metallurgy,including two big metallurgy complexes. Thefood-processing, textile and chemicalindustries are also represented. Theprocessing and consumer industry is stillabsent. With the introduction of foreigninvestors, the production of electronic andoptical devices, car components, and woodprocessing have become part of theindustrial scene. Evidence of the economicstability of the city is can be found in its high"A-" credit rating, granted to the city byStandard & Poor’s Agency. Its favourablelocation near the Polish and Slovak borders,the unique technical monuments and

B R I E F S TAT I S T I C SIndicator District RegionArea (sq. km) 214 5 427Population 310 751 1 251 883Inhabitants (sq. km) 1 452 230Average monthly wage (in EUR) 625 572Unemployment rate (%) 15.21 14.33Source: Czech Statistical Office (as of 30 June 2005)

Note: 1 EUR = CZK 30.03 as of 30 June 2005

S E L E C T E D F I R M SName Based in Sector ContactOKD Bastro,a.s. Ostrava engineering www.bastro.czHutní projekt Ostrava, a.s. Ostrava metallurgy engineering,

machinery engineering www.hutniprojekt.czVOKD, a.s. Ostrava mining constructions www.vokd.czVítkovice Holding Ostrava metallurgy, engineering www.vitkovice.czHutní montáže, a.s. Ostrava construction of building units www.hutni-montaze.czMetasport, a.s. Ostrava sport accessories www.metasport.czDako, a.s. Ostrava production of furniture www.atelierdako.comTchas, s.r.o. Ostrava engineering constructions www.ingstav.czHasil, a.s. Ostrava fire closing devices www.hasil.czVýtahy Ostrava, s.r.o. Ostrava lifts www.vytahy-ostrava.czSemi Service, a.s. Ostrava mining technique www.se-mi.czGCO plus, s.r.o. Ostrava building industry www.gco.czMobal, s..r.o. Ostrava products from plastics www.mobal.czOptima Diamant, s.r.o. Ostrava processing of diamonds www.diamant.czElektronické součástky , a.s. Ostrava electronics www.es-ostrava.czČemat trading, s.r.o. Bohumín manipulation technique www.cemat.czFite, a.s. Ostrava mining technologies www.fite.czKeravit, s.r.o. Ostrava refractory ceramics www.keravit.cz

F O R E I G N I N V E S TO R SInvestor Country of origin Czech partner Sector ContactAsus Holland Holding Netherlands Asus CZ,.s.r.o. electronics www.asus.czHayes Lemmerz Inc. USA Hayes Lemmerz Alukola, a.s. wheels for cars www.hayes-lemmerz.czHarsco Corporation USA Czech Slag-Nová huť, s.r.o. engineering www.harsco.comPhoenix International.Bet. Germany Pharmos, a.s. pharmaceutical industry www.pharmos.czKächele Cama Latex GmbH Germany KCL CZ, s.r.o. work protection instruments www.kcl.czAlpine Mayreder Bau Austria Alpine CZ, a.s. engineering constructions www.alpine-as.czSiemens A.G. Germany Siemens Industrial Services, a.s. production of electric machines www.siemens.czSuez Lyonnaise D.E. France Ostravské vodárny a kanalizace, a.s. adjustment and distribution of water www.smvak.czSABMiller plc. South Africa Plzeňský prazdroj, a.s.

(Pivovar Radegast,a.s.) production of beer www.radegast.czBorsod Chem Rt. Hungary BorsodChem-MCHZ, s.r.o. chemical production www.bc-mchz.czIngelectric Spain Ingelectric Czech Republic, a.s. automation www.ingelectric.czDanzas Holding Switzerland Danzas, s.r.o. haulage, logistics www.danzas.czCookson Holdings B.V. Netherlands Hinckley Slavia, a.s. refractory ceramics www.vesuvius.comDalkia France Dalkia Ostrava, a.s. energy production www.dalkia.cz

Ostrava – City

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Ostrava-Hrabová IndustrialPark Attracts New Investors During 2004, the City of Ostrava attracted ASUSTeKCOMPUTER INC.,a significant Taiwanese investor tothe Ostrava Hrabová Industrial Park. They launchedconstruction of a new European centre for theproduction and service of computers during 2005.The investment in this new enterprise and into theconstruction of the new repair centre should reachCZK 648 million (approximately EUR 22 million). Morethan 1 300 people will find work there. They havecreated great employment opportunities. It is alsoimportant that they will both produce and repaircomputers in Ostrava. A majority of the newly createdpositions will therefore be available for qualifiedexperts. This is a signal for other investors that theycan find more than just a cheap labour force in theOstrava region.

The ASUSTeK COMPUTER INC. company is known, above all, asa producer of consumer electronics for important Japanese andAmerican companies, but it also offers products under its own name,such as its highly reliable and very popular laptops.

The American company, CTS Corporation, a prominentconstructer and producer of electronic components for the car andelectronics industry, decided in 2005 to invest almost half a billionCzech crowns in construction of a new enterprise in Ostrava-Hrabová.They will create more than 160 new jobs within three years. AfterGreat Britain, the Czech Republic is the second European countrywhere CTS Corporation is investing in construction of a newenterprise. Production should be launched as soon as June 2006.

According to Ron Bell, Director of European Representation ofCTS, "Thanks to this investment in the Czech Republic, we will beable to increase our production capacities and to better supply theEuropean market that till recently has been mainly served by ourenterprise in Great Britain. Ostrava will be producing electroniccomponents and sensors for the car industry and other electroniccomponents". The American joint stock company CTS is one of theprominent constructers and producers of electronic components. Italso provides services in the area of the electronic industry (EMS) forsuppliers of basic equipment OEM (Original Equipment Manufacturer)in the car industry market, computers, and data transfers.

For more information, please see: www.kr-moravskoslezsky.cz/rr_hrabova.html

The industrial zone has a very advantageous and strategic position along theexpress road R56

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R E G I O N

Bruntál District

Městský úřad Bruntál(Bruntál Municipal Office)Nádražní 20792 01 BruntálCzech Republicphone: +420 554 706 111fax:+420 554 718 059e-mail: posta@mubruntal.czwww.mubruntal.cz

The District of Bruntál is situated in thenortheast of the Czech Republ ic ,bordering Poland. Because of its area, itbelongs among the larger districts in thecountry, representing 2.1 per cent of theRepublic's territory. Administratively, itcomprises of 68 municipalities, of which seven are towns. The towns of Bruntál(www.mubrunta l .cz ) , Krnov (www.krnov.cz), and Rýmařov (www.rymarov.cz)have extended competences for the othermunicipalities, as well as municipal officeswith public administrative powers. Thetown of Bruntál has traditionally been theDistrict's centre and became the seat ofthe Czech part of Silesia as early as the19th century. Today, it seats the Czechheadquarters for the Praděd Euroregion(www.europraded.cz). In the past, theregion of Bruntál was famous for itsmining: precious stones, gold, silver, andminerals of non-ferrous metals wereextracted here. Currently, the District has

an industrial and agricultural character. Itsinhabitants are mainly employed in themachinery, textile manufacture, andwood-processing industries. Industryemploys approximately 45 per cent of theworkforce. Agriculture has undergone animportant t ransformat ion, bothconcerning the structure of ownershipand agricultural production. Today, theshare of people employed in agriculturehas decreased to approximately 7.5 percent. In the past ten years, unemploymentrose considerably due to changes in theorganisational and ownership structure ofthe District's economy, the closure of

ineffect ive product ions , a morecompetitive environment, and otherfactors.

S E L E C T E D F I R M SName Based in Sector ContactAgroforest , a.s. Bruntál wood processing

and production www.agroforest.czPega, a. s. Krnov textile haberdashery www.pega.czKrnovské opravny a strojírny, s.r.o. Krnov machinery www.kos.czMoravolen Bruntál, a.s. Bruntál textile manufacture www.moravolen.czOdetka, a.s. Vrbno

p. Pradědem textile manufacture www.odetka.czRodinné domky Rýmařov, s.r.o. Rýmařov construction www.rdrymarov.czPila Krnov, s.r.o. Krnov wood processing www.pilakrnov.czAlfaPlastik, a.s. Bruntál chemical production www.alfaplastik.czPM-kovo, s.r.o. Jindřichov metal production www.pmkovo.czIR-Group, s.r.o. Bruntál metal production www.sweb.cz/ir.group/

F O R E I G N I N V E S TO R SInvestor Country of origin Czech partner Sector ContactGardena Manufacturing HmbH Germany Gardena Technik, s.r.o. plastics processing, household goods www.gardena.comOsram, GmbH Germany Osram Bruntál, s.r.o. chemical production www.osram-bruntal.czKorsnäs Packaging Aktiebolag Sweden Korsnäs Czech,s.r.o Úvalno paper packaging www.korsnas.comDen Braven Sealants Netherlands Den Braven Czech, s.r.o. glues www.denbraven.czPFT GmbH Germany Lisovny nových hmot, s.r.o. plastics moulding www.pft.deBuderus Heiztechnik Germany Dakon, s.r.o. machinery www.dakon.czIVG Holding Colbachini Italy IVG Holding Colbachini,s.r.o. rubber hoses www.ivgspa.it

B R I E F S TAT I S T I C SIndicator District RegionArea (sq. km) 1 657 5 427Population 99 138 1 251 883Inhabitants (sq. km) 60 230Average monthly wage (in EUR) 496 572Unemployment rate (%) 15.36 14.33Source: Czech Statistical Office (as of 30 June 2005)

Note: 1 EUR = CZK 30.03 as of 30 June 2005

Bruntál

Bruntál Chateau uniquely and remarkably links theRenaissance and Baroque styles � �

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Červený Dvůr Industrial Zone in Krnov is Attracting New InvestorsThe deciding factors for the IVGGroup to place its investment in the Bruntál area included thestrategic position of the zoneitself, ideal for the developmentof the eastern market, as well as the Czech investmentincentive scheme, and the pro-active approach of the local government in Krnov.The investor opened its operation in the Krnov industrial zone with theestablishment of the newIVG Colbachini CZ plant,at the end of 2002. The newfacility was built on an area of 100 000 sq.m. At present the factory has about 85 employees, and the number is increasing.

IVG COLBACHINI SPA, founded in Italy, is theworld leader in the manufacture of mandrel-built and covered industrial rubber hoses,which are produced in two factories innorthern Italy and in the Czech Republic.The successful start of the Italian investorwas followed by another Italian firm, STIS.R.L., which has property links with IVGColbachini. The construction of the hallcommenced in 2005, and will be completedat the beginning of 2006. New technologywill be brought in during the first quarter,and production is to start in May 2006. STICZ, s.r.o. is an engineering firm, and its 85

employees will make toothed wheels for theautomotive industry. Placement in theindustrial zone is also being negotiated byanother Italian investor - Industrie FerraroS.R.L. The Rame CZ company, a metal worksfirm, will provide jobs for 100 employees.The town of Krnov has acquired more landand has expanded the zone by 17.5 morehectares, bringing it to a total of 64hectares. Another investor interested inlocating to the zone is the German firmSANDER, which plans to make pressedcomponents for the car industry, andexpects to create further 250 jobs. ■

Many successful investors are operating in the Červený Dvůr industrial zone

B R I E F S TAT I S T I C SIndicator District RegionArea (sq. km) 1 273 5 427Population 226 995 1 251 883Inhabitants (sq. km) 178 230Average monthly wage (in EUR) 538 572Unemployment rate (%) 12.48 14.33Source: Czech Statistical Office (as of 30 June 2005)

Note: 1 EUR = CZK 30.03 as of 30 June 2005

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Frýdek-Místek District

Městský úřad Frýdek-Místek (Frýdek-Místek Municipal Office)Radniční 1148738 22 Frýdek-MístekCzech Republic phone: +420 558 609 111fax: +420 558 609 166e-mail: podatelna@frydekmistek.czwww.frydekmistek.cz

The Frýdek-Místek District lies in theeasternmost part of the Czech Republic. It isone of the country’s large districts with 77municipalities, seven of which are towns. The towns of Frýdek-Místek (www.frydekmistek.cz), Frýdlant nad Ostravicí(www.frydlantno.cz), Jablunkov (www.jablunkov.cz), Třinec (www.trinecko.cz), andVratimov (www.vratimov.cz) have extendedadministrative competences to include othermunicipalities.

The economy, employment, economicpotential, and the present structure of theDistrict have been strongly influenced by thehistorical development. The District alwayshad an agricultural-industrial character, withmetallurgy and mining being prevalent. In the

pharmaceutical and food industries. Forestscover 49 per cent of the District’s area. TheDistrict also has good conditions for tourism.

1960s and 1970s, the rising demand forworkers and the above-average wages inthese two main sectors attracted many peoplefrom other parts of the country. The economicconception changed over a short period in theearly 1990s. Heavy industry was rapidlyreduced, and mining was terminated in thePaskov and Staříč collieries. The number ofstate enterprises declined dramatically, andthe number of private enterprises soared.Foreign capital was gradually introduced.During the last decade, investment has goneinto the infrastructure, preparation of newindustrial zones, and environmentalprotection. The industrial branches includewoodworking, metallurgy, and the

F O R E I G N I N V E S TO R SInvestor Country of origin Czech partner Sector ContactMesser Griesheim GmbH Germany MG Odra Gas,s.r.o. technical gas production www.mgog.czHeinzel Group Austria Biocel, a.s. pulp production www.biocel.czGardena K+K GmbH Germany Gardena Třinec, s.r.o. gardening equipment www.gardena.czSaint Gobain Group France Veha, s.r.o. insulating glass www.veha.czSaft France Saft Ferak, a.s. NiCadmium batteries www.saft-ferak.czMayr-Melnhof Holz Gruppe Austria Mayr-Melnhof Sage, s.r.o. woodworking www.mm-karton.comVesuvius Solar Crucible Belgium Vesuvius ČR,s.r.o. metallurgy www.vesuvius.com

S E L E C T E D F I R M SName Based in Sector ContactTřinecké železárny,a.s. Třinec metallurgy www.trz.czSlezan,a.s. Frýdek-Místek textile industry www.slezanfm.czVÚHŽ,a.s. Frýdek-Místek automating equipment

for the automobile industry www.vuhz.czVálcovny plechu, a.s. Frýdek-Místek metallurgy www.vpfm.czWalmark, a.s. Třinec medicaments www.walmark.czAutel, a.s. Třinec electrical technology www.autel.czBeskyd, a.s. Fryčovice food industry www.beskyd.czSteeltec, s.r.o. Třinec engineering www.steeltec.czRanscon Electric Systems,s.r.o. Frýdek- Místek control systems www.transcon.cz

Fr˘dek-Místek

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R E G I O N

Karviná District

Magistrát města Karviná (Karviná City Council)Fryštátská 72/1733 24 Karviná Czech Republic phone:+420 596 387 111fax:+420 596 387 264e-mail: podatelna@karvina.orgwww.karvina.org

The Karviná District is situated in thenortheast of the Moravia-Silesia Region,along the Polish border. It ranks among thesmallest districts of the Czech Republic, butit is the most densely populated (275 496inhabitants). The District has 16municipalities, five of which are towns whichhave extended administrative competencefor the others. These are Bohumín(www.mesto-bohumin.cz), Český Těšín(www.tesin.cz), Havířov (www. havirov-city.cz),Karviná (www.karvina.org), and Orlová(www.mesto-orlova.cz).

The District is a part of an importantCentral European industrial agglomeration,including the northeast of the CzechRepublic, southern Poland, and northwestSlovakia. Companies involved withengineering, chemical, electricalengineering, and construction arerepresented in the area. Companies whichmanufacture automobiles or theircomponents operate on the Czech andPolish sides of the border. Foreign firms areinvolved in many of them. The Nové PoleIndustrial Zone (www.kr-moravskoslezsky.cz/rr_npole.html) provides the opportunity forinvestment, especially in the manufacture ofmachinery and equipment, components forthe automobile industry, plastic materialprocessing, and production for the electricalengineering and construction industries.

With 64 600 inhabitants, Karviná is thethird largest town in the Moravia-SilesiaRegion and it is also the heart of the District.The Region puts great emphasis on

education – for example, Karviná has theBusiness Faculty of the Silesian University,which provides education in economics,management, and marketing. The manysecondary vocational schools and apprenticetraining centres are the reason for so manyqualified and motivated workers. Onecharacteristic feature of the Karviná area arethe expanses of water, some of which areartificially created fish ponds. Most of themhave originated by the flooding of gravel andsand pits and hollows, which came aboutdue to the ground sinking as a result of twocenturies of coal mining. Typically, there isa large amount of salty mineral waters risingfrom the mines. "Darkov Water", which is

one of the strongest iodobromine brines inEurope, is used for spa treatment in LázněDarkov (www.darkov.cz).

B R I E F S TAT I S T I C SIndicator District RegionArea (sq. km) 347 5 427Population 275 496 1 251 883Inhabitants (sq. km) 794 230Average monthly wage (in EUR) 539 572Unemployment rate (%) 18.95 14.33Source: Czech Statistical Office (as of 30 June 2005)

Note: 1 EUR = CZK 30.03 as of 30 June 2005

S E L E C T E D F I R M SName Based in Sector ContactJäkl Karviná, a. s. Karviná metallurgy www.jakl.czLázně Darkov, a.s. Karviná spa treatment www.darkov.czKovona Systém, a.s. Karviná metal products www.kovona.czDurst, s.r.o. Karviná garden ceramics www.durst.czStavokomp,a.s. Karviná construction www.stavokomp.czRosh, a.s. Orlová textile production www.rosh.czBochemie, s.r.o. Český Těšín chemical production www.bochemie.czNábytek Falco, s.r.o. Karviná furniture manufacture www.nabytek-falco.czKlimaprodukt, a.s. Karviná air conditioning www.klimaprodukt.czRepax, s.r.o. Orlová pumps, alarm systems www.repax.czKarimpex, a.s. Orlová machinery and equipment

manufacture www.karimpex.cz

F O R E I G N I N V E S TO R SInvestor Country of origin Czech partner Sector ContactBebro Electronic GmbH Germany Befra Electronic, s.r.o. electronics www.befra.czN.V.Bekaert S.A. Belgium Bekaert - ŽDB Bohumín, a.s. metallurgy www.zdb.czLichtgitter GmbH Germany Lichtgitter CZ, s.r.o. steel grate manufacture www.lichtgitter.czShimano P.L. Japan Shimano Czech Republic, s.r.o. bicycles www.shimano.czRecylim N.V. Belgium Czech Plastic Production, s.r.o. plastics production www.czechplastic.czMolnlycke Health Care Sweden Czech Klinipro,s.r.o. surgical instruments www.molnlycke.comGrupo Bimbo S.A. Germany Park Lane Confectionery,s.r.o. sweets www.parklane.czRockwool International Denmark Rockwool,a.s. building insulation www.rockwool.czStant Manufacturing USA Stant Manufacturing, s.r.o. automobile components www.stant.cz

Karviná

The statutory town of Karviná has been a university town since 1990 – the Business Faculty of the SilesianUniversity in Opava is based there

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More Foreign Investment for Karviná

Stant Manufacturing Inc., a USproducer of automobile parts,has decided to make aninvestment of almost CZK 200million (about EUR 7 million) inthe Czech Republic, and thus hasgenerated at least 100 new jobs.In a building leased in Karviná,the company has been producingfuel tank caps and valves for carmakers of world renownedbrands such as Jaguar, Ford, LandRover, Aston Martin, Mazda, andothers since 2005.

"The quality of our products is ofimmense importance to us. For thisreason, the Czech Republic prevailedbecause of its automotive tradition andthe quality of Czech labour", said MarlonBa i l y, V ice P res ident and Genera lManager of S tant . "We are nowconsidering locating both our productionactivities and our design activities toKarviná. The new design centre wouldemploy up to 25 engineers." The USTomkins Group, of which S tantManufacturing Inc. is a subsidiary, isa leading global producer of automotivecomponents and tools. The Group alsoincludes the following companies: Gates,Idea l , P lews /Ede lmann, S tandard-Thomson, Stant, and Trico. The productsfrom these companies are manufacturedand so ld a l l over the wor ld .Manufacturers of vehicle parts have alsobeen joined by the UK company GatesHolding Limited, which in 2005 startedthe production of high-pressure hydraulichoses in a leased hall. The interest of

foreign investors in the Moravia-SilesiaRegion has been growing recently. Thepresence of the Technical University ofOstrava, with whom the investors plan tocooperate closely, is crucial for investors.

More at www.stant.com

Stant Manufacturing Inc. has been manufacturing inKarviná fuel tank caps and valves for renownedautomobile producers since 2005.

B R I E F S TAT I S T I C SIndicator District RegionArea (sq. km) 918 5 427Population 159 225 1 251 883Inhabitants (sq. km) 173 230Average monthly wage (in EUR) 567 572Unemployment rate (%) 10.76 14.33Source: Czech Statistical Office (as of 30 June 2005)

Note: 1 EUR = CZK 30.03 as of 30 June 2005

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R E G I O N

Nový Jičín District

Městský úřad Nový Jičín(Nový Jičín Municipal Office)Masarykovo náměstí 1741 01 Nový JičínCzech Republicphone: +420 556 768 364fax: +420 556 701 188e-mail:posta@novyjicin-town.czwww.novyjicin.cz

The District of Nový Jičín is situated in thesouth of the Moravia-Silesia Region. On itsarea of 918 sq. km, 159,225 inhabitantslive in 57 municipalities. The towns witha wider scope for possible activities andpublic administration authority for the restof the municipalities include: Bílovec(www.bilovec.cz), Frenštát pod Radhoštěm(www.frenstatpr.cz ) , Kopř ivn ice(www.koprivnice.cz), Odry (www.odry.cz),and Nový Jičín (www.novyjicin.cz), whichis the regional centre with 27 700inhabitants.

Machinery, electrotechnics, textilemanufacture, as well as agriculture, aretraditionally represented in the district.

The territory has relatively rich rawmaterial supplies for the production of

construction materials (e. g. limestone,gravel sand, brick clay, stone, sialitic clays,minerals for cement production, and soon). Stone deposits near Jakubčovice nadOdrou and limestone supplies near thetown of Štramberk are also important. Theinvestment activities in the 1990s werefocused on creating the industrial zone inNový Jičín. The infrastructure was veryquickly completed and there were newpetrol stations and businesses built.

S E L E C T E D F I R M SName Based in Sector ContactTonak, a.s. Nový Jičín textile manufacture www.tonak.czVojenský opravárenský podnik , s.p. Nový Jičín machinery www.vop025.czLonka, a.s. Příbor textile manufacture www.lonka.czMlékárna Kunín, a.s. Kunín food processing www.mlekarnakunin.czAlmaPneu, s.r.o. Šenov u Nového Jičína tyre protectors www.almapneu.czPhobos, s.r.o. Frenštát p.Radhoštěm optical equipment www.phobos.czMassag, a.s. Bílovec machinery www.massag.comDřevoplast, v.d. Nový Jičín wooden houses www.drevoplast.czKasst,s.r.o. Studénka office supplies www.kasst.czLari CZ, s.r.o. Šenov u Nového Jičína sanitary systems www.lari.czDec-Plast,s.r.o. Příbor plastic windows www.dec-plast.czPamet, s.r.o. Suchdol n.Odrou metal production www.pamet.czSeimex, s.r.o. Nový Jičín military technology www.seimex.cz

F O R E I G N I N V E S TO R SInvestor Country of origin Czech partner Sector ContactTerex Corporation USA Tatra, a.s. trucks www.tatra.czTrinity Rail Group USA Thrall Vagonka Studénka, a.s. railway wagons www.thrallvs.czVisteon-International Holdings Inc. USA Autopal, s.r.o. car industry www.visteon.czSiemens AG Germany Siemens Elektromotory,s.r.o. electrical engines www.siemens.czSemperit A.G. Austria Semperflex Optimit, a.s. plastic and rubber products www.semperit.comConnex Transport AB Sweden Connex Morava, a.s. transport www.connex.czMuller Weingarten GmbH Germany Muller Weingarten ČR, s.r.o. metal cutting www.mwcorp.comBang &Olufsen Denmark Bang & Olufsen,s.r.o. electronics www.bang-olufsen.comBrose Group Germany Brose CZ, s.r.o. car industry www.brose.deCirex B.V. Netherlands Cirex CZ, s.r.o. metal processing www.cirex.czPrimus Central Europe Belgium Primus Central Europe, s.r.o. machinery www.ivc.cz

The Danish company Bang & Olufsen willmanufacture brand loudspeakers, audiophones, and video pre-assembled parts inthe new factory they are going to build inKopřivnice. The investment will reachapproximately CZK 450 million in the secondfinancial year from the company’sfoundation, and this amount could be even

higher for the following five years. Bang &Olufsen will provide 250 factory jobs in theKopřivnice industrial zone near Nový Jičínduring the autumn of 2006. "We havechosen Kopřivnice from among almost fortyother localities throughout three countries.We were attracted by the industrial traditionof this region, as well as by the tradition of

the automobile and electronics industries,"says John Bennett-Therkildsen, ExecutiveDirector of Bang & Olufsen. The Danishcompany manufactures luxury audio andvideo equipment which is renownedthroughout the world for its technicalexcellence and original design.

www.bang-olufsen.com

Luxury Electronics Manufacturer Will Set up in Kopřivnice

Nov˘Jiãín

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Opava District

Statutární město Opava(Statutory Town of Opava)Magistrát města (Town Council)Horní náměstí 69, 746 26 OpavaCzech Republicphone: +420 553 756 111fax: +420 553 756 141e-mail: epodatelna@opava-city.czwww.opava-city.cz

The District of Opava is situated in thenorth of the Moravia-Silesia Region.Geographically, it is an interesting territorydividing two large European mountainmassifs: the Giant Mountains and theCarpathians. On the District's area of 1 126sq. km, 180 278 inhabitants live in 80municipalities. The towns with extendedcompetences and public administrationauthorities for the rest of the municipalitiesinclude: Hlučín (www.hlucin.cz), Kravaře(www.kravare.cz), Vítkov (www.vitkov.info), and Opava (www.opava-city.cz),which is the statutory town of the regionwith 62 468 inhabitants. The District ofOpava is still mainly agricultural, being atthe heart of regional agriculturalproduction. Farmland covers roughly 82 per cent of the total agricultural land area of approximately 70 198 ha. Onecharacteristic of this district is a lower sharein industry and a broader diversificationthan in the Ostrava region. The following

industries are represented here: machinery,textile manufacture, food processing,pharmaceutical industry, furnituremanufacture, and construction materials.Employment in agriculture and services isalso at higher levels here. Privatisationduring the 1990s caused a radicalreduction in the number of state-ownedcompanies and a massive boom in privateenterprise. Since 1990, Opava has beenhome to the Si les ian Univers ity(www.slu.cz).

B R I E F S TAT I S T I C SIndicator District RegionArea (sq. km) 1 126 5 427Population 180 278 1 251 883Inhabitants (sq. km) 160 230Average monthly wage (in EUR) 519 572Unemployment rate (%) 10.63 14.33Source: Czech Statistical Office (as of 30 June 2005)

Note: 1 EUR = CZK 30.03 as of 30 June 2005

F O R E I G N I N V E S TO R SInvestor Country of origin Czech partner Sector ContactIVAX International B. V. USA Ivax CR, a.s. pharmaceutics www.ivax.czKAPPA Packaging Netherlands Kappa Karton Morava,s.r.o. paper processing www.kappapackaging.czNOWACO Group Denmark Nowaco Mrazírny, a.s. food processing www.nowaco.czW.Zebisch Management GmbH Austria AVHB Hydraulika, s.r.o. hydraulics www.avhb.czLite-on Enclosure, Inc. Taiwan Lite-on Precision Industry s.r.o. electrotechnics, plastic materials www.liteon.comModel Holding Switzerland Model Obaly, a.s. packaging www.modelgroup.comSewing-Maschmier Germany Prestar, s.r.o. machinery www.prestar.czDanone Groupe France Opavia-LU, s.r.o. food processing www.opavia-lu.czHansen+Reinders Germany Ostroj-Hansen+Reinders, s.r.o. electronics www.ohr.cz

S E L E C T E D F I R M SName Based in Sector ContactModel Obaly, a. s. Opava paper manufacture www.modelgroup.comBalakom, a. s. Opava production of paints and varnishes www.balakom.czFemont, s. r. o. Opava steel constructions www.femont.czFerram, a. s. Opava machinery www.ferram.czArako, s. r. o. Opava valves for nuclear power plants www.arako.czOstroj Opava, a. s. Opava machinery www.ostroj.czMSA, a. s. Dolní Benešov valves www.msa.czTrido Silesia, s.r.o. Opava automatic door systems www.trido.czProfily, s.r.o. Opava rubber sealings www.profily.cz

Opava

The Silesian University, many secondary schools, and cultural and scientific institutions are based in Opava

The Industrial Zone with the Best TownPlanning Solution, CT Park Ostrava, isbeing prepared in Ostrava by a private

developer, and the Brownfield of the Yearaward went to the Škoda Plzeň IndustrialZone.

■ T H E C Z E C H R E P U B L I C AT T H E TO P A G A I N "Industrial zones prepared in time helpedthe Czech Republic to be again the most

successful country in Central and EastEurope in terms of the amount of attractedinvestment per inhabitant", said TomášHruda, new CEO of the CzechInvest Agency,and added: "So far 280 investors havepledged to create almost sixty thousand jobsin the supported zones. For every crown thatwas spent from the state budget to buildindustrial zones, private companies havenow invested CZK 32 (approx. EUR 1) in newproduction facilities".

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I N V E S T M E N T

The "Černovická terasa" Industrial Zone in Brno Receivedthe Highest MarksAt the end of October 2005, theCzech Government ministershanded out awards for the bestquality and most beneficialindustrial zones in the CzechRepublic. The "Industrial Zone ofthe Year" awards are given everyyear by the CzechInvest Agencyunder the auspices of theMinistry of Industry and Trade, incooperation with the Associationfor Foreign Investment (AFI), andpartners in the "Partnership toSupport Foreign DirectInvestment in the CzechRepublic". The site rated as theindustrial zone with the mosteconomic benefit was theČernovická terasa IndustrialZone in Brno, the site with themost social benefit was theOstrava-Hrabová Industrial Zone(1st Stage).

■ " Č E R N OV I C K Á T E R A S A "I N D U S T R I A L Z O N E I N B R N OThe Černovická terasa Industrial Zone, on anarea of 179 hectares, is a leading strategiczone in the Czech Republic. The success ofthis project is documented by the fact that ithas achieved full occupancy over a relativelyshort period of time, and the companieswhich are present there rank among worldleaders, such as Daikin Industries, Aguna,Daido Metal, and Ohmori. This industrialzone has also proved successful as anexample of cooperation between a publicentity, in this case the Statutory City of Brno,and a private developer, who is operatingsuccessful projects to lease production hallson a part of the area.

■ " K R Á L OV S K Ý V R C H "I N D U S T R I A L Z O N E I N K A DA ŇThis site is the pilot project of a privately-owned supported zone. The site has nowbeen completed, and thanks to theproximity of a power station can meet fullyeven the highest energy demands ofinvestors. It has attracted quite a number ofmajor investors recently, such as thecompanies Kyocera Solar Europe, Donaldson

Industrial, Arla Plast, Zanini and Staba-Service Antikor

■ C H E B I N D U S T R I A L PA R KThe zone offers an attractive location amidstmajor transport junctions, close to a road toGermany, as well as sites withcommunication links and technicalinstallations for investors, who would ideallybring manufacturing with a higher valueadded. At the moment the zone is virtuallyfull. Companies which have decided to placetheir investments there include JSPInternational, Sneeberger, Playmobil, TUPBohemia, and Granit Union. The quality ofthe Cheb Industrial Park is documented bythe fact that it won the Industrial Zone withthe Best Town Planning Solution award in theprevious year.

■ O S T R AVA - H R A B OVÁI N D U S T R I A L Z O N E ( 1 S T S TAG E )With regard to the high unemployment ratein the Moravia-Silesia Region, investments bycompanies such as ASUSTek are highlyimportant to the area. The zone is yetanother example of successful cooperationbetween the municipal authority and

a private developer, who provides productionhalls as well as modern office buildings.Thanks to this joint project, over 2 200people will find jobs in the zone in the nextfew years.

■ T Ř I N E C - BA L I N Y I N D U S T R I A LZ O N EThis zone is situated in a region whereunemployment is at almost 13 per cent. Thedecision of investors such as Ergon and JAPTrading, and the companies of Kern andVesuvius, which cooperate with the Třineckéželezárny iron and steel works, greatly helpedimprove the situation and create new jobs.The Třinec-Baliny industrial zone is thusranked among projects of a high socialsupport and importance for the Region.Good news for investors: although thepresent site is fully occupied at the moment,another 20 hectares are being added toextend the zone.

■ KO P Ř I V N I C E I N D U S T R I A LPA R KThe Kopřivnice zone is popular amonginvestors, which is best reflected by the firstplace it won in the same category (Industrial

Industrial Zone of the Year Winners

The site rated as the industrial zone with the most economic benefit was the Černovická terasa Industrial Zone inBrno, the site with the most social benefit was the Ostrava-Hrabová Industrial Zone (1st Stage)

■ T H E " I N D U S T R I A L Z O N E O F T H E Y E A R 2 0 0 4 " A WA R D SW E R E P R E S E N T E D I N T H EF O L L O W I N G C AT E G O R I E S :

1. "Černovická terasa" Industrial Zone in Brno2. "Královský vrch" Industrial Zone in Kadaň3. Cheb Industrial Park

1. Ostrava - Hrabová Industrial Zone (1st Stage)

2. Třinec-Baliny Industrial Zone3. Kopřivnice Industrial Park

CTPark Ostrava

Škoda Plzeň / HQU International a.s.Industrial Zone

Plant of the Beneš a Lát, slévárna a strojírnaa.s. foundry and machine works

Petr Matoušek, Manager of the Písek–Čížovská Northern Industrial Zone

The other nominees in this categorywere: Jiří Strádal, Manager of the ChebIndustrial Park, and Miroslav Netolický,Manager of the Moravská Třebová IndustrialZone.

Industrial zones eligible for the awardswere those which met the definitionunder the Ministry of Industry and Tradeand the CzechInvest Agency’sProgramme to Support Industrial ZoneDevelopment-primarily zones in whichan investment was announced in thegiven period by at least one investor inthe manufacturing industry, businesssupport services, or technology centres.The evaluation criteria reflected both thequantitative and qualitative aspects ofindustrial zone development during2004. On the basis of the Industry andTrade Ministry Programme to SupportIndustrial Zone Development, supporthad been granted to 89 industrial zonesup to the end of 2004. Investors have sofar occupied almost 70 per cent of theprepared sites, which is optimumoccupancy. The remaining areas areavailable to dozens of investors who arecurrently looking for suitable locations inthe Czech Republic.

Jana VíškováCzechInvest

www.czechinvest.org

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Zone with the Best Social Benefit) last year.As compared to last year, unemployment inthe region has fallen to 10 %, undoubtedlydue to the jobs created in this industrial zone.Firms that have opted to invest here recently,and thus join last year’s investment of Bang &Olufsen, include the companies MGG andSeeber.

■ C T PA R K O S T R AVACTPark Ostrava represents a fitting solutionto an industrial zone where its concept offersspace not only for manufacturing but also forbusiness support services as well as researchand development. An independentcommission found its architectural and townplanning design very successful. The zone iswell incorporated into the town’s plan –becoming an organic part of it. Thecommission selected the project for theaward because of its overall town planningconcept, professional approach to thepreparation of the project, and itscontribution to research and development.

■ B R OW N F I E L D O F T H E Y E A RŠ KO DA – P L Z E ŇI t is a challenging project for the

regeneration of a vast area, unmatched inthe Czech Republic to date. Its purpose isto regenerate sites and buildings of a totalarea of 160 hectares in the former Škoda-Plzeň complex, and prepare them forfurther use. The complex had to be givena thorough regeneration, including the demolit ion of bui ldings, soi ldecontamination, etc. The project wasparticularly demanding, as production isstill continuing on the premises near thecentre, and the work is also complicated bythe fact that it is situated inside the city.Once the regeneration is completed, thecomplex will be fully incorporated into thecity of Plzeň.

■ P R O J E C T F O R " T H EC O N V E R S I O N O F T H EI N D U S T R I A L C O M P L E X O FA F O R M E R S P I N N I N G M I L L AT S L A N Á N E A R S E M I LY I N TOA F O U N D RY " , C A R R I E D O U T B YT H E B E N E Š A L ÁT, S L É VÁ R N AA S T R O J Í R N A A . S. F O U N D RYA N D M AC H I N E WO R K S.Proof that projects of a smaller size withouthuge financial requirement can also be very

interesting from the architectural andurbanistic point of view. The project of theBeneš a Lát firm was selected by the expertindependent commission for the award notonly because of its location, its incorporationinto the landscape, and link-up withtransport facilities, but also due to its overallarchitectural design.

■ I N D U S T R I A L Z O N E M A N AG E RO F T H E Y E A R , P E T R M ATO U Š E K The quality and success of industrial zonesalso greatly depend on the professionalapproach of the managers of industrialzones. The managers must be able to ensurethe presentation of industrial zones, theirmanagement and development, and tocoordinate the necessary preparations for theentry of investors. The independentcommission assessed the managers in threerounds and on this basis nominated thefollowing for the title of Manager of theYear: Petr Matoušek, Manager of the Písek –Čížovská Northern Industrial Zone and thisyear’s winner, Jiří Strádal, manager of theCheb Industrial Park, and Miroslav Netolický,Manager of the Moravská Třebová IndustrialZone.

Industrial Zone with theBest Economic Benefit

Industrial Zone with theBest Social Benefit

Industrial Zone with theBest Town Planning Solution

Special Award forIndustrial Zone Manager

Brownfield of the Year

The Most SuccessfulReconstruction ofa Business Property in2004 (under the RealEstate/OPIE Programme)

The original model is based on theprinciple of fibre forming in a strongelectric field. In this special process,

called electrospinning, a fibre of such a smalldiameter is made so that it cannot beobserved by a light microscope, no matterhow strong it is. The fibres can be viewedonly by electron microscopes. Nanofibrelayers have extraordinary properties andrepresent a new type of material that can beused in many areas, such as extremefiltration, tissue engineering, the treatmentof burns, and other medical applications."Of course, the university does not have thepotential to produce machines for industry.This is why we will grant the firm anexclusive licence, based on our research anddevelopment, so that it can produce thisequipment. And the firm will have theexclusive right to sell the machinery. Theuniversity will retain ownership of thepatents, and if any profit is earned from thecooperation, it will be divided between the

partners", explains Oldřich Jirsák, theprorector of the university in charge ofinternational relations, science, andresearch.

■ I N V E S T M E N T W O R T HM I L L I O N S O F C R O W N SAccording to the Elmarco Chief Executive,the firm is prepared to invest the amountneeded for the production of the technology,its applications, and presentation of theresults. "This will apparently be in the orderof millions of crowns (CZK), but we considerit a good investment. At the end ofSeptember 2005, a prototype of theequipment was put into trial operation, andwe will run and present it together with theTechnical University of Liberec. The trialoperation will be implemented in thecompany’s facility, because the universitydoes not have the necessary space. However,university students are expected to havepractical training here. We will produce themachine, and then sell it. The firm willnaturally take care of everything that isneeded to put it on the market", ElmarcoCEO Ladislav Mareš comments.

■ PAT E N T I N T H E O F F I N GThe firm will file an international patent fornanofibre production for its industrialequipment, which is now almost complete.The university naturally welcomes thepossibility of protecting its research results,as well as protecting the resources neededfor further development, since it has so farbeen alone in funding this project. The newmachinery will bring opportunities also forindustrial factories in the region, becauseboth the Technical University and Elmarcoplan to offer it primarily to Czech producers-- particularly firms in the region. "The priceof the new machine will not be exorbitant,Czech firms will be able to afford it. Theconcept is brilliant and simple at the sametime. Thus the price can be low, and it willdefinitely sell well", Ladislav Mareš believes.

■ A U N I Q U E F I B R ENanofibre production development andapplications are currently beingimplemented by a number of facilities in theworld, for instance NASA in the USA.Nanofibre materials show extraordinarygeometrical properties and a high specificsurface area, on very small diametersmeasured only in nanometres. Otherproperties of importance for the differentapplications are the surface/mass andsurface/volume ratios. For most applicationsnanofibre layers have the mass of severaltenths of a gramme per square metre. The

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Nanospider Weaved from the Threads of Cooperation"It could not be done withoutthe Technical University ofLiberec", says Ladislav Mareš,CEO of the Elmarco company.Over a relatively short period of time, a team at the TechnicalUniversity of Liberec, Non-wovenTextiles Department, workingtogether with the Elmarcocompany, developed a functionallaboratory model of a fibre forming machine,which has a good chance offinding a place in industry.

The team of the Non-woven Textiles Department has developed a functional laboratory model of a spinningmachine, which has a chance of serving in industry

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Elmarco is a wholly Czech firm, which wasset up in 2000. Focusing on theproduction of state-of-the-art technology,the firm operates in the world industrialmarkets. Currently Elmarco has 90 employees. In 2004 it invested CZK sixmill ion (EUR 0.2 mill ion) in newtechnologies, and in 2005 its investmentin new production facilities was aboutCZK 35 million (EUR 1.2 million). Itsrevenues have been growing by 300 %year-on-year, in 2005 the firmimplemented contracts exceeding CZK500 million (EUR 16.7 million), andexpects a profit of CZK 50 million (EUR 1.7 million).

Nanotechnology is a conceptually newapproach to the use of those propertiesof substances which critically depend onnanometre dimensions, and theapplication of knowledge of the creationof useful materials, structures, andequipment. Research and development inthese fields opens possibilities ofunderstanding new phenomena andforming new properties at micro andmacro levels. In 2004, worldwideinvestments from public funds into theresearch of nanotechnologies wereapproximately EUR 3.5 billion of whichEUR 1.15 billion in the European Union,EUR 0.81 billion in Japan, and EUR 1 billion in the USA

New prospects were opened by theapproach based on the knowledge ofthe properties of the different atoms,

molecules, and their self-assembling, and ontotally new materials and quantumphenomena induced by nanometricaldimensions. The cardinal impulse came withthe invention of new apparatus - scanningmicroscopes that use atomic strengths andtunnelling – which "made atoms visible".

■ W H AT A R E T H E O B J E C T I V E SO F T H E P R O G R A M M E ?1. Through an effective transfer ofknowledge, to widen the range ofindustrially usable technologies based on thepractical use of nanoparticles, nanofibres,nanocoatings, nanostructures, andnanocomposites in producing materials inthe Czech Republic and, in particular, theassessment of possible adverse influences ofnanoparticles and nanofibres on theenvironment and humans.2. Designing new biosensors and diagnosingsystems making possible sensitive detectionof molecular objects, and supporting theintroduction of modern nanotechnologicalmaterials and methods into the practice ofmedicine in the Czech Republic.3. Designing new apparatuses, instruments;equipment for the creation andcharacterization of highly differentiatednanostructures; the development of new

equipment being developed by the TechnicalUniversity in cooperation with the Elmarcofirm leads directly to the manufacture ofnanofibre material layers and must becapable of meeting the values mentionedabove.

■ TO P T E C H N O L O G I E S B O R NO U T O F C O O P E R AT I O NNanofibres are well set to be applied notonly in industry as an excellent filtrationmaterial, but they are also suitable formedical applications – for the cultivation ofhuman tissues. Elmarco establishedcooperation with the Technical University ofLiberec in the summer of 2005. Chiefexecutive Ladislav Mareš says that it isElmarco’s ambition to become a world player

in top technologies. "This cannot be donewithout the university; the cooperation willcontinue. An industrial firm and theuniversity can push development ahead, wemust invest so that we are not overtaken",Ladislav Mareš emphasizes. He adds that thefirm will cooperate with both doctoral andunder-graduate students, and cooperationwill not be limited to the Faculty of TextileEngineering, but will be extended to otherfaculties as well.

Aleš VlkAdviser to the CzechInvest CEO

Note: The article uses data from a case studyof the Technical University of Liberec

The Czech Republic Will Give Support to Nanotechnology

M O R E A T :

www.vyzkum.cz

www.avcr.cz

methods for manipulating and interlockingnanoobjects with micro and macrosurroundings; and microelectronics inparticular.4. Designing, preparing , characterising, andmodelling of new nanostructures suitablefor detectors, photonic crystals, and lasers;and Designing, preparing, andcharacterising new semiconductor spintronicmaterials for the development of a newgeneration of nanocomponents forinformation recording and transmission. ■

Nanotechnology is very suitablefor the Czech Republic, as it isa branch in which knowledgehas greater weight than tonnes.The country has many small andmedium-sized firms with greathuman potential, whose way to world markets would bepaved by the mastering and introduction ofnanotechnological products.This was why the CzechGovernment approved materialsupporting the development of nanotechnology. Due to thefocus of microelectronics on reducing the sizes ofcomponents, nanotechnologysteps into everyday life.

Nearly USD 1 million is currently beinginvested in Brno (South Moravia Region)by GigaByte Technology of Taiwan, whichproduces computer components. Thisleading global IT manufacturer is buildinga high-tech repair centre in the CzechRepublic, where customers from allcorners of Europe will send their laptops,graphics cards and motherboards.GigaByte Technology chose the CR overother Centra l European countr ies ,including Hungary, which was the CzechRepublic’s main competitor. Brno owesthis success primarily to the good qualityof its infrastructure and the ample,qualified work force. The service centrewill be built in Brno despite the fact thatthe company wi l l not rece ive anygovernment investment incentives. Itsexecutives have thereby confirmed thatour country has much to offer foreigninvestors. For more information, see:www.gigabyte.com

Japanese giant Kyocera Corporation,a well-known manufacturer of electricalcomponents, opened its new solar panelproduct ion p lant in Kadaň, CzechRepublic. This is the first productionfacility of its kind in the Czech Republic."We believe that economic developmentcan be in harmony with the environment.The new plant in the Czech Republicshould make a significant contribution tooverall production. We anticipate that thecompany’s share on the European solarpanel market should increase from 16%to 21% and from 11% to 18% on theworld market," said Isao Ike Yukawa,Genera l Manager of Solar EnergyProduction at Kyocera Corporation."Kyocera Corporation’s new plant isactually the company’s second project inthe Czech Republic. The first was in 1992when AVX Czechoslovakia, now AVXCzech Republic s.r.o, also owned byKyocera, was established in Lanškroun,"said Josef Lebl, Advisor to CzechInvest’sCEO, and added: "Japanese companies

rank among the most significant investorsin the Czech Republic. The size of plannedJapanese investment coming v iaCzechInvest has already exceeded USD 2.5billion."For more information, see:www.kyocerasolar.com

Kiekert, a German automobile accessoriesmanufacturer, has decided to double itsproduction capacity in the Czech Republic."The world is globalising and competitionis getting tougher and tougher. The Czechsubsidiary has extraordinary significancefor us if we are to continue to maintain ourposition and competitiveness on worldmarkets," said Wolfgang Theis, Chairmanof the Board at Kiekert. Kiekert-CS isa subsidiary of the German concern KiekertAG, the largest world manufacturer oflatches and lock systems for theautomobile industry, and, employing some1400 people, the Czech branch is one ofthe largest employers in the East BohemiaRegion.For more information, see:www.kiekert.cz

Benteler Automobiltechnik, one of thelargest international independent suppliersof the automobile industry with itsheadquarters in Paderborn in Germany,recently held a festive opening ceremonyfor another new plant in Rumburk in theÚstí Region of the Czech Republic. "Thisnew plant concurs with the celebrations of10 years of our business operation in thiscountry," said Klaus Glaeser, ManagingDirector for North Europe at BentelerAutomobiltechnik in his address on theoccasion of the opening ceremony. Theplant wi l l produce ax les, safetycomponents for car-body work, andchass is parts us ing cutt ing-edgetechnology. Benteler Automobiltechnik isnow represented in the Czech Republic byplants in Stráž nad Nisou, Liberec,Chrastava, and Rumburk. In these plants,the company employs over 1000employees. For more information, see:www.benteler.de

| 38

I N V E S T M E N T

KaleidoscopeLeading Indian BPO Provider:Progeon EstablishesOperations in the CzechRepublic

Progeon s.r.o, a subsidiary ofProgeon Ltd, one ofIndia’s leading business processoutsourcing (BPO) companies,has completed its first phase of operations in CzechRepublic’s second largest city –Brno. This is the first significantproject in this field in the CzechRepublic by an Indian company.The centre will provide itsclients with end-to-end processmanagement services inmultiple languages. "The CzechRepublic is an attractivedestination for companies likeours that hope to addressa broad European market," saidAkshaya Bhargava, ManagingDirector and CEO, Progeon Ltd."Brno has excellentinfrastructure and facilities,a supportive government, andpeople with multiple languageskills."

For more information, see:www.progeon.com

Taiwanese Investor to Open High-tech RepairCentre in the CzechRepublic

Kyocera Launches Uni-que Production of SolarPanels

Kiekert Expands and Doubles Production in the Czech Republic

Benteler AutomobiltechnikOpens New Plant

�

Prague Stock Exchange

The Exchange Rates of CZK in Relation to Main World Currencies

400

600

800

1000

1200

1400

1600

XII/03I/04II/04III/04

IV/04V/04

VI/04

VII/04

VIII/04

IX/04X/04

XI/04

XII/04I/05II/05III/05

IV/05V/05

VI/05

VII/05

VIII/05

IX/05X/05

XI/05

XII/05

1340

1360

1380

1400

1420

1440

1460

1480

1500

1.11.05

5.11.05

9.11.05

13.11.05

17.11.05

21.11.05

25.11.05

29.11.05

3.12.05

7.12.05

11.12.05

15.12.05

19.12.05

23.12.05

27.12.05

29.12.05

28,8

29,0

29,2

29,4

29,6

29,8

1.11.05

5.11.05

9.11.05

13.11.05

17.11.05

21.11.05

25.11.05

29.11.05

3.12.05

7.12.05

11.12.05

15.12.05

19.12.05

23.12.05

27.12.05

29.12.05

EUR

24,0

24,2

24,4

24,6

24,8

25,0

25,2

1.11.05

5.11.05

9.11.05

13.11.05

17.11.05

21.11.05

25.11.05

29.11.05

3.12.05

7.12.05

11.12.05

15.12.05

19.12.05

23.12.05

27.12.05

29.12.05

USD

29

28

33

34

30

31

32

XII/03I/04II/0

4III/04

IV/04V/

04VI/04VII/04

VIII/0

4IX/04 X/

04XI/04XII/04I/05II/0

5III/05IV/05 V/

05VI/05VII/05

VIII/0

5IX/05 X/

05XI/05

XII/05

EUR

20

22

24

26

28

30

XII/03I/04II/04III/04IV/04V/04VI/04

VII/04

VIII/04IX/04X/04XI/04

XII/04I/05II/05III/05IV/05V/05VI/05

VII/05

VIII/05IX/05X/05XI/05

XII/05

USD

Index PX 50 (12/2003 – 12/2005) Index PX 50 (01. 11. – 31. 12. 2005)

39 |

C Z E C H B U S I N E S S A N D T R A D E

Selected Economic Indicators

Construyan sobre el futuro

25.–29. 4. 2006Brno, Recinto FerialRepública Checawww.stavebniveletrhybrno.cz

FERIASDE CONSTRUCCIÓNBRNO 2006

Al mismo tiempo se celebra:

Ferias de Construcción Brno:

Feria internacional de inversiones, fi nanzas, bienes e inmuebles y tecnologías para ciudades y municipios